Just Group is being acquired by Brookfield Wealth Solutions (BWS) in a £2.4bn (€2.8bn) deal.
The board of BWS and Just Group have reached an agreement on the terms of a recommended cash offer made by Bidco, a wholly owned subsidiary of BWS, to acquire the entire issued and to-be-issued share capital of Just Group.
BWS will pay 220p per share in cash for Just Group, a 75% premium to Just Group’s closing share price of 126p on Wednesday evening, valuing the bulk purchase annuity (BPA) insurer at £2.4bn.
While BWS currently operates primarily in North America, it has been strategically focused on the UK market, and recently announced the launch of its UK insurance operations through its wholly-owned subsidiary Blumont Annuity Company.
Through the acquisition, BWS hopes to combine Blumont with Just Group to create a “leader in the UK annuity and live insurance space”, it said.
BWS intends for Blumont and Just Group to operate as a single, consolidated insurance group under the Just Group brand. It will look to build on Just Group’s strong offering in the UK pension risk transfer market, which currently holds over £1trn in assets and anticipates volumes of £40-50bn per year in the coming years.
It added that the acquisition positions Just Group to maintain its offering in individual annuities while enhancing its ability to capitalise on evolving retirement trends, including the growing opportunities in defined contribution (DC) pensions, with £1.3trn in UK DC assets projected across 14.9 million active savers by 2044.
Just Group was advised by Evercore and JP Morgan Cazenove, and was recommended to vote in favour of the acquisition.
Sachin Shah, chief executive officer of BWS, said the acquisition of Just Group will accelerate BWS’s growth ambitions for the UK. She added that the UK is a “core” region for the investment firm, given its status as one of the “world’s preeminent pension markets combined with highly attractive investment opportunities”.
He said: “We look forward to supporting Just’s growth in the UK, building on its commitment to providing financial certainty and excellent service to its policyholders. We own and operate insurance companies built for long-term success, supported by high-quality assets, and are committed to providing ironclad retirement security products.”
John Hastings-Bass, chair of Just Group, said: “The acquisition reflects the strength of Just’s business and the significant financial and strategic progress the Just management team, led by David Richardson, has delivered in recent years.”
He also welcomed BWS’s strategic plan for Just Group, which he said will benefit the existing and future customers, as well as Just Group employees and the UK economy through investment in productive assets.
David Richardson, group CEO of Just Group, said that BWS’s scale, investment expertise and alignment with Just Group’s purpose will enable the insurer to broaden its reach and enhance its offering, which he said will “accelerate the fulfilment of our purpose to help more people achieve a better later life”.
Second acquisition in the UK PRT market
This is the second acquisition in the UK pensions risk transfer market this month. Earlier this month, pan-European savings and retirement services group Athora was set to acquire the UK-based pension risk transfer specialist Pensions Insurance Corporation (PIC) for £5.7bn.
PIC has a portfolio of £50.9bn backing the pensions of 400,000 people. The insurer has £30bn invested in the UK, of which £13.8bn is invested in UK housing and infrastructure.
Charlie Finch, partner at LCP, said the second acquisition marks a “strong vote of confidence” in the UK market and follows a period of expansion with four insurers entering the UK PRT market in the past two years.
He said: “It marks a change of direction for Brookfield, which had launched their own UK insurance company, Blumont, only in March, but combining with Just gives them a springboard to further accelerate their ambitions in the UK market.”
“For now, Blumont and Just continue to operate separately and compete on pension risk deals that come to market.”
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