UAP to raise pounds 500m from Sun Life float

Sun Life, the UK life insurer with more than pounds 19bn of funds under management, is to be partly floated off on the Stock Exchange in a listing expected to raise pounds 500m for Compagnie UAP, its French owner.

The partial sale of Sun Life and Provincial Holdings, which also includes UAP Provincial, a general insurance subsidiary, and New Ireland, a life and pensions provider in the Republic of Ireland, is expected to take place in the summer.

UAP, which will remain a majority shareholder in the company, said yesterday that its decision was in line with the practice it had adopted towards subsidiaries it owns in Germany and Belgium.

The French company declined to say what it intended to do with the pounds 500m it plans to raise. However, sources said this did not indicate that Sun Life might go on the acquisition trail as a result.

Dominique Bazy, director general at UAP, said: "Our strategy towards our overseas business has always been to establish strong local identities and to devolve significant independence to the local management. The listing of Sun Life and Provincial Holdings is consistent with our strategy."

Michael Hart, chief executive at Sun Life, said: "At the end of last year, Sun Life and Provincial Holdings became a profit centre for UAP's interests in the UK and Ireland. Flotation represents a logical and exciting step forward in the development of our group.

"I believe that a listing will enhance the identity of Sun Life and Provincial Holdings and its operating subsidiaries. As a listed company [it] will have greater financial flexibility but will continue to enjoy the benefits of being part of the UAP group."

Sun Life is one of the top five life assurance companies, as measured by its 1995 regular and single premiums. Last year, it made pre-tax profits of pounds 90.2m, while gross premium income stood at pounds 1.6bn.

The company received 80 per cent of its business through independent financial advisers, with the remainder coming from its 250-strong salesforce.

UPA Provincial, which specialises in commercial property, liability and goods in transit cover, together with personal lines insurance, is the 13th- largest non-specialist UK insurer. It reported a pre-tax profit of pounds 64.2m last year. New Ireland, is the second-largest life and pensions provider in the Republic, contributing pre-tax profits of Irpounds 10.4m (pounds 10.7m) to its parent company in 1995.

Sun Life and Provincial Holdings has been the totally-owned subsidiary of its French parent since 1995, when it bought out a 50 per cent stake from Transatlantic, a US holding company, for pounds 527m.

Until last year, Sun Life and its subsidiaries had been jointly owned by Transatlantic and UAP since 1991. UAP is the second-largest insurance group in Europe, with about pounds 77bn in funds under management. Its premium income last year reached pounds 20.3bn. The company began building up its stake in Sun Life in 1988.