Phoenix Group to buy AXA wealth assets

Phoenix said the acquisition, which comprises a pensions and investments business offering a range of propositions catering to both individual and corporate requirements, would add £12.3bn of assets under management and over 910,000 policies.

In addition, it said there would be significant diversification benefits from the deal, resulting in net capital synergies of around £250m within six months of completion, inclusive of the impact of cost synergies of £10m a year.

The deal is expected to generate cash flows of approximately £0.3bn between 2016 and 2020 and £0.2bn from 2021 onwards.

Phoenix said the consideration would be funded from an equity placing and a new short-term debt facility, which it expects to repay within six months of completion.

Chief executive officer Clive Bannister said: "The acquisition of the Embassy and SunLife businesses represents another important step forward in Phoenix's growth strategy. The transaction meets our acquisition criteria and will generate additional cash for the group which supports the proposed increase in Phoenix's dividend.

“The Group has extensive integration experience and expertise and we believe that both the Embassy and SunLife businesses are a strong fit, benefitting both shareholders and policyholders alike. We will invest heavily to ensure a smooth transition of the two businesses from AXA to Phoenix and we are committed to delivering the highest level of service to both direct and IFA customers, as we do for our existing customers.”