Prudential to sell full-service retirement business to Empower for $3.5bn

Prudential Financial, Inc. has agreed to divest its full-service retirement business to Empower Retirement, a Denver-based retirement plan recordkeeping financial holding company, for $3.55 billion.

The sale includes Prudential Financial’s full-service retirement plan recordkeeping and administration business. The divested business will be backed by a capital of $2.1 billion which comes from a mix of the balance sheet of the transferred business and Empower Retirement’s capital and surplus.

Through the deal, Empower Retirement is expected to add considerable expertise, a larger set of capabilities, and an expanded product portfolio to its existing business. Furthermore, the deal will bring in additional scale to employers and benefit retirement investors who sponsor workplace savings plans.

Ed Murphy – President and CEO of Empower Retirement said: “Empower and Prudential share a commitment to serving the financial needs of working Americans, their advisors and employers. This transaction will create an even stronger service organization at Empower, fueled by technology and the expertise of our deep talent pool.

“We will continue to leverage our scale and resources to challenge the status quo and be uniquely positioned to serve the retirement and wealth management needs of millions of retirement savers in every phase of their financial journey.”

Prudential Financial’s full-service retirement recordkeeping business is made up of 4,300 plus workplace savings plans. Nearly four million participants have saved $314 billion in assets through the plans.

The business also includes over 1,800 employees engaged in offering retirement recordkeeping and administration services to plan sponsors, financial professionals, and participants.

Charles Lowrey – Prudential Financial Chairman and CEO said: “Today’s announcement is a significant milestone in Prudential’s transformation and the execution of our strategy to become a higher growth, less market sensitive, more nimble business.

“In Empower, we have found a partner that, like Prudential, is passionate about expanding financial opportunity for more people, and that has the scale and expertise to ensure the long-term success of the full-service retirement business.”

Prudential Financial plans to use the proceeds from the sale for general corporate purposes.

The deal, which is subject to customary regulatory approvals, is anticipated to close in Q1 2022.