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Daily Insurance Industry News
Tuesday 21st of May 2019
July 23, 2007

Resolution and Friends Provident in merger talks

by Gill Montia

Story link: Resolution and Friends Provident in merger talks

Friends Provident and Resolution Life, the UK’s biggest manager of closed life funds, are reported to be in the early stages of talks on a merger that could create an £8.3 billion group.

Friends Provident is the UK’s fourth largest life insurer and is also the majority owner of F&C, the asset management firm.

Resolution and Friends Provident are seen as good candidates for such a move because cash generated from Resolution’s book of life policies could be used to fund the expansion of an enlarged group.

Resolution has been growing rapidly in recent times, having acquired closed life business from Abbey National, Scottish Mutual, Scottish Provident and Abbey National Life.

Insurance industry sources have revealed that in the event of a merger, Friends Provident shareholders would own 49.1% of the new company, with Resolution investors holding the balance.

If a merger takes place it would create a group larger than Standard Life and only slightly smaller than Legal & General.

However, other insurance companies, including Axa and Standard life, are interested in a merger with Resolution.

Friends Provident employs 4,829 people and has offices in Exeter, Dorking, Salisbury, Manchester and London.

Resolution is in the process of outsourcing some of its back office operations to Capita, and will be left with 1,500 staff.

Some have voiced concerns that combining the two companies would lead to a number of job losses.

 

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