Britain's Phoenix Group to buy Deutsche Bank's Abbey Life Assurance for $1.22 bn

Britain's Phoenix Group Holdings today struck a deal to buy Deutsche Bank AG's UK insurance business Abbey Life Assurance Co for £935 million ($1.22 billion) in cash.

Phoenix said it would fund the deal by raising £735 million via a rights issue and from £250 million new bank facility.

Phoenix, Britain's largest owner of life assurance funds closed to new customers, said the deal would add £10 billion of assets under management and approximately 735,000 policyholders.

Deutsche Bank said that the proposed deal would result in a pre-tax loss of about €800 million ($895 million), primarily resulting from impairment of goodwill and intangible assets.

Abbey Life is a life insurance group that specialises in the management of closed life and pension funds predominantly comprising unit-linked life and pensions policies and annuities in payment.

It also manages two with-profit funds, other non-profit funds and a small permanent health insurance book.

Abbey Life had approximately 735,000 policyholders and £10 billion of assets under management.

Commenting on the Acquisition, Phoenix's CEO, Clive Bannister said, ''This is a pivotal deal for Phoenix, giving us the platform and scale to continue as a leader in the consolidation of the UK life industry.''

''This attractively-priced deal meets precisely Phoenix's areas of strategic focus and stated acquisition criteria, whilst significantly increasing our cash generation and supporting a further increase in our proposed dividend,'' he added.