Resolution said it has accepted a £4.9 billion cash-and-shares takeover offer from rival Standard Life and withdrawn its recommendation of the merger with Friends Provident.
Under the offer, each Resolution shareholder will receive 517p in cash and 0.715 new Standard Life shares
The deal will also see the disposal of certain Resolution assets to Zurich-based life insurer Swiss Re for £2.35 billion in cash.
The proposed takeover would create a new UK life insurer with 7 million customers and annual sales of about £8.6 billion.
It will deliver pre-tax cost synergies of at least £53 million per annum by the end of 2010 and financial synergies of £18 million per annum before tax, said Standard Life.
Capitalising markets
'We are looking forward to working with our new colleagues to capitalise on the many opportunities this brings us,' Standard Life chief executive Sandy Crombie said in a statement.
The UK life insurer had said on Thursday it was in “advanced discussions” on a possible recommended offer for Resolution, indicating that agreement was close.
Standard Life has agreed to refund the £94 million break fee that Resolution would have to pay Friends Provident for abandoning their tie-up.
The Takeover Panel had extended a deadline for Standard Life to declare a firm intention for Resolution until noon today, giving it more time to finalise an offer, and allowing Resolution to abandon a previously agreed merger with Friends Provident.
October 26 2007
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