As part of the agreement, which values ReAssure at GBP 3.25 billion:
- Swiss Re will receive a cash payment of GBP 1.2 billion, shares in Phoenix representing a 13% to 17% 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% to 15% stake.
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 policies1, giving it an enhanced platform to pursue further growth opportunities.
As part of the transaction, Swiss Re will reacquire the 25% stake in ReAssure currently held by MS&AD. The consideration for this purchase will be Phoenix shares with value of up to GBP 1.0 billion at signing. This represents a GBP 0.1 billion premium to MS&AD's cost base2 for its holding in ReAssure.
It is currently estimated that the transaction will result in a 12 percentage points increase in Swiss Re's Group SST ratio and generate economic profit of USD 0.3 billion. The impact of the reacquisition of shares from MS&AD will be reflected in the Group's shareholders' equity.
The transaction is expected to close in mid-2020, subject to approvals by Phoenix's shareholders, regulators and anti-trust authorities.