Swiss Re was mulling the future of its ReAssure unit since it canceled the IPO in summer. Now it has found a buyer for the U.K.-based business.
Swiss Re, the world’s second-largest reinsurer, agreed to sell the ReAssure unit to Phoenix Group, the company said in a statement on Friday. The deal implies a value of 4.2 billion Swiss francs ($4.25 billion) for the U.K. unit of Swiss Re.
This is also the amount that Swiss Re had hoped to gain from an initial public offering of ReAssure, an IPO it canceled due to a lack of interest from investors.
Cash and Stock Deal
Phoenix will pay £1.2 billion in cash and the rest in stock, according to the statement. Phoenix is Europe’s largest life and pensions consolidator.
Swiss Re will get a stake of about 13 to 17 percent of Phoenix, depending on Phoenix’s share price at closing of the sale. The deal is expected to close in mid-2020.
Decision on Use of Proceeds Pending
The transaction will have a positive impact on Swiss Re’s Group Swiss Solvency Test (SST) ratio and a negative impact on the fourth-quarter result. Swiss Re’s board of directors will assess the optimal use of the proceeds of the sale and provide an update with the release of the full-year results.
