UK insurer Britannic Group Plc on June 09, said it had agreed a 1.8 billion pound ($3.29 billion) merger with privately owned Resolution Life Group to create a specialist closed life fund business with the financial firepower to snap up big deals in this fast-growing sector.
Britannic said the merged group, which will adopt the Resolution name and brand, will have about 6 million policies and 35 billion pounds of life company assets.
The deal is classified as a reverse take-over, but Clive Cowdery, Resolution's Chief Executive, said in a call with analysts the deal was "a true merger of equals with no premium being offered on either side," a verdict that was supported by analysts.
Britannic will issue 164.2 million new shares to Resolution investors, who will hold 45.5 percent in the combined group, valuing Resolution at 835 million pounds based on Britannic's Wednesday closing share price of 508-1/2 pence.
The new company will adopt Britannic's existing dividend policy, which targets an 11 percent annual growth rate to 2009, as a basis.