Phoenix plans more deals after SLA buy

Phoenix Group, which is set to complete the deal to buy Standard Life Aberdeen’s (SLA) UK and European insurance business later this month, yesterday said it was keen to do more deals as it looks to further build scale.

Unveiling strong half-year results, the specialist insurer also said it expects to beat a key financial target after the integration of two earlier acquisition deals went ahead of plan.

The firm said group operating profits had edged up to £216 million from £215m in the same period last year but said it now expects to exceed the upper end of a two-year cashgeneration target of between £1 billion and £1.2bn it set itself. That was due to earlier acquisitions of parts of AXA and Abbey Life completing ahead of plan and targets, delivering cost synergy benefits of £27m a year.

Group chief executive Clive Bannister said the deal with SLA represents a “pivotal moment in the group’s history” and said more deals were in the pipeline.

“The Standard Life Assurance acquisition is a stepping stone on our consolidation journey, but it isn’t the final destination and we remain focused on doing more transactions.”

In February SLA agreed to sell its insurance arm to Phoenix in a £3.2bn deal. Under the terms Phoenix will pay £2.2bn in cash and SLA will also take a 20 per cent stake in Phoenix. SLA will continue to be the asset-manager for the insurance business acquired by Phoenix as well as the assets it already manages for the group. The deal is expected to be completed on 31 August. 0 ‘More transactions’ – Phoenix’s Clive Bannister