Specialist annuity providers Just Retirement and Partnership are planning a £1.7bn merger.
The Enhanced Annuity providers are to merge and become the JRP Group, it has been announced today.
The companies would raise £150m in equity even though they anticipate annual savings of £40m at a one-off cost of £60m. Both are comfortably capitalised on paper. But meeting the EU’s incoming Solvency II standard seems to be the driver for this deal. The merger is expected to result in Just Retirement shareholders owning 60% of the combined group with Partnership shareholders owning around 40%. The deal values Partnership at £668.5 million. The new business will be headed up by Rodney Cook, current Just Retirement Chief Executive, who will be group Chief Executive of the JRP Group. Steve Groves the current Chief Executive of Partnership, will step down from his role and leave the group when the merger completes. The deal is the second major merger in the insurance sector since the Budget 2014. In April Aviva completed the takeover of rival Friends Life. More details will be released over the coming months regarding the JRP Group.