Phoenix Group is buying Sun Life of Canada UK for £248m in a deal that will see its customers offered access to Standard Life products.
Sun Life UK operates a life company, Sun Life Assurance Company of Canada (U.K.) Limited, which is a closed book with life, pensions and annuity business. It does not write new business, other than offering increments on current policies to existing customers on a passive basis. At 31 December 2021, Sun Life UK had around.480,000 in-force policies and around £10 billion of assets under administration, of which £2.5 billion are annuities that will remain reinsured with Sun Life.
Phoenix Group CEO Andy Briggs says: “The acquisition of Sun Life UK is highly attractive for Phoenix Group and demonstrates the significant value that smaller cash funded M&A transactions can deliver for our shareholders. We expect this acquisition to deliver incremental long-term cash generation of around £470 million, inclusive of cost and capital synergies. This supports a 2.5% dividend increase, in line with our ambition to sustainably grow our dividend over time.
We welcome the colleagues who will join us from Sun Life UK, and as the UK’s largest long-term savings and retirement business with a strong track record of closed book integrations, we look forward to offering a safe home for Sun Life UK’s customers over the long term. I am pleased that we will also be able to offer Sun Life UK’s customers access to our broad range of Standard Life products in our Open division.”