Phoenix Group to acquire Sun Life UK for £248m

Phoenix Group Holdings has agreed to acquire Sun Life UK, a closed book UK life insurance firm, from Sun Life Financial for £248 million in cash.

Sun Life UK operates a largely outsourced business model. The majority of its policy administration is already carried out by TCS Diligenta, which is also an outsourcing partner of Phoenix Group. According to Phoenix Group, this supports a simplified operational integration program.

The British life insurance company said that in line with its vision to diversify its credit portfolio, it has also entered into a new long-term strategic asset management partnership with Sun Life.

Phoenix Group to acquire closed book UK life insurance firm Sun Life UK. Photo courtesy of Bread Bailey/Wikipedia.org.

Andy Briggs — Phoenix Group CEO said: “The acquisition of Sun Life UK is highly attractive for Phoenix Group and demonstrates the significant value that smaller cash funded M&A transactions can deliver for our shareholders.

“We expect this acquisition to deliver incremental long-term cash generation of around £470 million, inclusive of cost and capital synergies. This supports a 2.5% dividend increase, in line with our ambition to sustainably grow our dividend over time.”

Phoenix Group expects the acquisition of Sun Life UK to close in Q1 2023, which will be subject to regulatory approvals.