Swiss Re to sell subsidiary

Swiss Re has announced that the organisation will sell its subsidiary ReAssure Group plc to Phoenix Group Holdings plc. As part of the agreement, which values ReAssure at GBP3.25 billion, Swiss Re will receive a cash payment of GBP1.2 billion, shares in Phoenix representing a 13 percent  to 17 percent stake and be entitled to a seat on its Board of Directors.

ReAssure’s minority shareholder, MS&AD Insurance Group Holdings Inc, will receive shares in Phoenix representing an 11 percent to 15 percent stake. The respective number of shares Swiss Re and MS&AD receive will depend on Phoenix’s share price at closing of the sale, while the total shareholding of both companies is fixed at approximately 28 percent.

Christian Mumenthaler, Swiss Re’s Group CEO, said: “We believe this transaction maximises long-term value for Swiss Re shareholders. Swiss Re’s goal has been to deconsolidate ReAssure, and we are pleased to have found a strong buyer for the business. The strategic rationale for the combination of the businesses is compelling, and we look forward to working together with Phoenix and to sharing the financial benefits of the combination.“

The transaction will reinforce Phoenix’s position as Europe’s largest life and pensions consolidator with GBP 329 billion of assets under administration and more than 14.1 million policies, giving it an enhanced platform to pursue further growth opportunities.

As part of the transaction, Swiss Re will reacquire the 25 percent stake in ReAssure currently held by MS&AD. The consideration for this purchase will be Phoenix shares with value of up to GBP1.0 billion at signing. This represents a GBP0.1 billion premium to MS&AD’s cost base for its holding in ReAssure.

The transaction is expected to close in mid-2020.