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Daily Insurance Industry News
Sunday 19th of August 2018
July 26, 2007

Friends Financial emerges from merger talks

by Gill Montia

Story link: Friends Financial emerges from merger talks

Friends provident and Resolution have successfully negotiated an £8.5 billion merger that will take the form of an all-share transaction.

The merged companies will be called Friends Financial and will rival Legal & General and Standard Life in terms of its size and assets.

The move will give Friends Provident access to capital, while Resolution, which is the UK’s largest closed life fund manager, will benefit from a brand that will fit its expansion strategy.

Under the terms of the agreement, Resolution shareholders will own 50.9% of the merged business, receiving 3.25 new Friends Provident shares for each of their own shares.

The merger is seen as a turning point in the restructuring of the UK life insurance industry.
The process has led to some smaller providers leaving the market, encouraging the formation of large-scale companies which expect to be making sustainable returns by the end of the decade.

Friends Financial will have assets of £165 billion and annual profits close to £1 billion.
However, the merger is expected to create cost savings of £100m by 2010, and a substantial number of jobs could be at risk.

 

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