Annuity provider secures takeover agreement

Annuity provider Just Retirement has agreed to take over rival Partnership Assurance for £668.5 million in a bid to shore up their positions in a part of the pensions industry that has changed radically over the last 18 months after changes announced by George Osborne.
By The Newsroom
Published 11th Aug 2015, 14:05 BST

The industry has been looking for new forms of revenue since the Chancellor changed the rules in last March’s Budget, now in force, to allow pensioners to retire without having to buy an annuity, which provides a life-long income.

Both firms said the merger would strengthen the position of the enlarged group in the UK, give it the scale to develop new retirement products and expand overseas.

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Under the terms of the deal, Just Retirement will own 60 per cent of the new firm - called JRP Group - with Partnership Assurance shareholders owning 40 per cent of the business, after receiving 0.834 shares in the new company for each Partnership share held. The merger is based on a Just Retirement share price of 199p and a Partnership price of 166p. The deal is expected to complete in December this year.

Shares in Just Retirement slipped slightly, while Partnership Assurance stock lifted.

The firms added that they also intended to raise around £150m of fresh capital to help progress their plans.

They said in the UK the enlarged company “will seek to utilise its improved scale, efficiency and capital strength to continue providing customers with better value alternatives to products offered by larger incumbent insurers”.

Related topics:Budget