Insurance fund group Phoenix is in talks to buy smaller rival Guardian Financial Services in a deal that could reportedly be worth more than £1bn.
Phoenix – Britain’s largest consolidator of life funds that are closed to new business – confirmed discussions over a possible takeover following reports.
The talks come amid a wave of consolidation in the life and pensions sector as it grapples with major changes following reforms announced by Chancellor George Osborne in last year’s Budget.
New pensions freedoms, introduced on April 6, mean that instead of being required to buy an annuity with their pension pot, people aged 55 and over have more flexibility to take their pots how they wish.
Guardian, which has been put up for sale by private equity owner Cinven, manages around £18bn of pensions, savings and protection policies for more than 900,000 policyholders across Europe, including 695,000 customers in the UK and Ireland.
Phoenix has five million policyholders and £52bn in assets. Shares in the FTSE 250-listed firm rose 3 per cent after news of the talks.
But Phoenix said talks were not exclusive and said there was no certainty a firm offer will be tabled.
Other firms, such as Admin Re and buyout firm CVC Capital Partners are also said to be eyeing Guardian as part of the sale process.
Phoenix said it has been looking at various potential deals and is “well positioned to take advantage of the consolidation opportunities in its sector”.
Other major deals in the sector have included Aviva’s £5.2bn takeover of Friends Life, while Just Retirement and Partnership Assurance recently announced plans to merge.