Singapore investment firm GIC and the US-based Massachusetts Mutual Life Insurance Company (MassMutual) have agreed to acquire Blackstone’s 36 per cent stake in the UK-based annuity provider Rothesay Life, according to a press statement.
The deal value is reported at 5.75 billion pounds ($7.4 billion).
Following the completion of the transaction, GIC and MassMutual will increase their shareholding to 49 per cent each in Rothesay Life. However, the completion of the transaction is subject to regulatory approvals.
“Rothesay will continue to differentiate itself by providing a full range of solutions on a large scale, as well as by taking full advantage of strategic prospects with a value- and risk-driven approach to underwriting,” said CEO Addy Loudiadis.
GIC, MassMutual, and Blackstone have been shareholders in Rothesay Life since December 2013. At the time, the three parties acquired a 64 per cent stake from Goldman Sachs, in a deal that was rumoured to be worth 900 million pounds, according to an ai-CIO report.
The transaction in 2013 was prompted by new capital requirements under the Basel III regulation, which encouraged Goldman Sachs to explore different options with Rothesay Life. However, Goldman kept a 36 per cent stake in the insurer at that time.
Goldman Sachs then sold a 33 per cent stake in August 2017 to GIC, MassMutual and Blackstone. Rothesay Life’s management held the remaining stake, as reported by PI Online.
Since Blackstone’s initial investment in 2013, Rothesay Life has executed over 16 billion pounds worth of new business until 2019, as well as successfully expanded into attractive new asset classes. “Rothesay is now recognised as a market leader in de-risking solutions,” said Qasim Abbas, senior managing director at Blackstone.
Established in 2007, Rothesay Life has assets under management of 56 billion pounds and insures the pensions of over 800,000 individuals. The company’s strong growth has been achieved through the accumulation of pension scheme clients, significant strategic acquisitions, and the reinsurance of annuity portfolios.
Existing Rothesay Life clients include pension schemes and customers associated with names such as Asda, National Grid, Allied Domecq, Cadbury’s, telent, Prudential, British Airways, Lehman Brothers, and Aegon.