Resolution to double its insurance operations
Resolution's chief executive, John Tiner, said he planned to nearly double the size of the company's insurance operations after sealing the £2.75bn purchase of French giant AXA's UK operations.
The Guernsey-based operation plans to merge the business with Friends Provident, which it already owns, before seeking further insurance deals. But Mr Tiner refused to give any details of job losses saying it was "too early" for that.
However, Resolution plans to reap savings of £75m a year from the combined businesses, which means a large number of redundancies is all but inevitable.
Mr Tiner also declined to comment on whether one of the those deals could be a takeover of Prudential UK. There has been speculation that Resolution has been courting Prudential investors with a view to a bid for the operation.
Mr Tiner said: "We've got a lot of work to do integrating AXA UK with Friends Provident. I'm not going to comment on any other deals, but the businesses we own have an embedded value of £6bn and we'd like to get that to £10bn."
The deal will see Resolution paying £2.25bn in cash and £500m in new shares. Mr Tiner was at pains to point out that much of the underwriting for the share issue was being borne by Resolution's existing investors, who will receive a fee of around 1.75 per cent. That could leave as little as 1 per cent for investment banking underwriters led by Barclays Capital and RBC Capital Markets. The average underwriting fee is 3.25 per cent.
Mr Tiner also said that Resolution was consulting with the finance arm of the Unite union over the potential job losses. While the deal includes AXA's traditional life insurance and pensions businesses together with its annuity business, it does not involve the company's wealth management arm.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 3 Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 5 UK weather: 'Coldest night of the year' tonight as freezing temperatures plummet to -10C
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...