Rothesay to Acquire MetLife's UK Bulk Annuity Portfolio
February 18, 2014
LONDON and NEW YORK – February 18, 2014 -- Rothesay Life Limited (Rothesay Life) and MetLife, Inc. (NYSE:MET) (MetLife) today announced that Rothesay Life will acquire MetLife Assurance Limited (MetLife Assurance), a subsidiary of MetLife. MetLife Assurance is a leading specialist bulk annuity pension provider, with approximately £3 billion in assets under management. The acquisition is expected to be completed in the second quarter of 2014, subject to regulatory approval and satisfaction of other closing conditions. The terms of the agreement were not disclosed.
Since the start of 2013, Rothesay Life has concluded £1.8 billion of transactions, including pensioner buy-ins with Philips (£484 million), Cobham (£280 million) and Smith & Nephew (£190 million) and a buyout with InterContinental Hotels (£440 million) with total business written now covering in excess of 165,000 members. Macro-economic and demographic factors are set to drive demand and Rothesay Life expects there to be further long term expansion in pension insurance buyouts and buy-ins.
Established in 2007, MetLife Assurance has been a well-known and successful supplier of bulk annuities in the U.K. and Irish markets, securing the benefits of more than 20,000 members. It maintains the capital standards and prudent reserves required by the Prudential Regulation Authority to safeguard all of its customer benefits and, as such, benefit obligations to trustees and pension payments to individual policyholders will not be affected by this sale.
The decision by MetLife to sell MetLife Assurance does not involve MetLife’s other businesses in the U.K., in particular the U.K. wealth management and employee benefits business (MetLife Europe Limited), or MetLife’s U.S. pension risk transfer business.
MetLife’s financial adviser for this transaction is Citigroup Capital Markets Inc. and the company’s legal adviser is CMS Cameron McKenna LLP. Rothesay Life’s financial adviser for this transaction is Goldman Sachs and the company’s legal adviser is Linklaters LLP.
Addy Loudiadis, CEO of Rothesay Life, said:
"The acquisition of MetLife Assurance makes Rothesay Life the U.K.’s largest dedicated provider of defined benefit de-risking solutions, with over £10 billion of assets under management.
She continued: “The U.K. pension de-risking market has experienced recent strong growth, with transaction levels approaching the 2008 high. The acquisition of the £3 billion MetLife Assurance annuity portfolio follows the acquisition of Paternoster in 2011 and builds on Rothesay’s strong organic growth track record, taking transactions since the start of 2013 to £4.8 billion. The deal comes just after the successful diversification of the investor base, with Blackstone, GIC and MassMutual joining Goldman Sachs as shareholders.
Rothesay Life has an exciting future capitalising on a reputation for providing innovative pension solutions to U.K. pension funds and their sponsors. MetLife Assurance’s customers can be assured their pensions will continue to be paid by a secure and well-capitalised insurer.”
For Rothesay Life:
Temple Bar Advisory Limited +44 (0)20 7002 1080 or +44 (0)7795 425580
Alex Child-Villiers, Tom Allison or William Barker
For MetLife, Inc.:
Media: John Calagna
001 (212) 578-6252
Investors: Edward Spehar
001 (212) 578 7888
About Rothesay Life Limited
Rothesay Life Limited was established in 2007 and has become one of the leading providers of regulated insurance solutions in the U.K. market for pensions de-risking, with over £12 billion of insurance contracts. In 2012, Rothesay Life Limited wrote over £1 billion of new bulk annuity business and has written nearly £1.8 billion since the start of 2013 with total business written now covering in excess of 165,000 members. This strong growth has been achieved through the steady accumulation of pension scheme clients and the acquisition of Paternoster in 2011.
Existing Rothesay Life Limited clients include the pension schemes and members associated with such names as RSA, British Airways, P&O, Rank, Uniq, General Motors, the MNOPF (Merchant Navy Officers Pension Fund), InterContinental Hotels and Philips.
Rothesay Life Limited is a secure long term provider of pensions, focused on:
- a flexible and committed approach to execution;
- ongoing risk management to maintain balance sheet strength; and
- robust operational processes.
Rothesay Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
About MetLife Assurance Limited
MetLife Assurance Limited in the U.K. is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. MetLife Assurance Limited operates under the MetLife brand name. In the U.K. and Ireland, MetLife Assurance works with companies, their advisers, and pension scheme trustees to provide innovative pension risk transfer solutions. Services are delivered from the MetLife Assurance registered office in London.
MetLife Assurance Limited has £3 billion in assets under management, and has secured the pension benefits of more than 20,000 scheme members.
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers. MetLife holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com
This news release may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results. Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining the actual future results of MetLife, Inc., its subsidiaries and affiliates. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forwardlooking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife, Inc.’s filings with the U.S. Securities and Exchange Commission (the “SEC”). These factors include: (1) difficult conditions in the global capital markets; (2) increased volatility and disruption of the capital and credit markets, which may affect our ability to meet liquidity needs and access capital, including through our credit facilities, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge collateral or make payments related to declines in value of specified assets, including assets supporting risks ceded to certain of our captive reinsurers or hedging arrangements associated with those risks; (3) exposure to financial and capital market risks, including as a result of the disruption in Europe and possible withdrawal of one or more countries from the Euro zone; (4) impact of comprehensive financial services regulation reform on us, as a potential non-bank systemically important financial institution, or otherwise; (5) numerous rulemaking initiatives required or permitted by the Dodd-Frank Wall Street Reform and Consumer Protection Act which may impact how we conduct our business, including those compelling the liquidation of certain financial institutions; (6) regulatory, legislative or tax changes relating to our insurance, international, or other operations that may affect the cost of, or demand for, our products or services, or increase the cost or administrative burdens of providing benefits to employees; (7) adverse results or other consequences from litigation, arbitration or regulatory investigations; (8) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (9) investment losses and defaults, and changes to investment valuations; (10) changes in assumptions related to investment valuations, deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (11) impairments of goodwill and realized losses or market value impairments to illiquid assets; (12) defaults on our mortgage loans; (13) the defaults or deteriorating credit of other financial institutions that could adversely affect us; (14) economic, political, legal, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (15) downgrades in our claims paying ability, financial strength or credit ratings; (16) a deterioration in the experience of the “closed block” established in connection with the reorganization of Metropolitan Life Insurance Company; (17) availability and effectiveness of reinsurance or indemnification arrangements, as well as any default or failure of counterparties to perform; (18) differences between actual claims experience and underwriting and reserving assumptions; (19) ineffectiveness of risk management policies and procedures; (20) catastrophe losses; (21) increasing cost and limited market capacity for statutory life insurance reserve financings; (22) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, and for personnel; (23) exposure to losses related to variable annuity guarantee benefits, including from significant and sustained downturns or extreme volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and the adjustment for nonperformance risk; (24) our ability to address difficulties, unforeseen liabilities, asset impairments, or rating agency actions arising from business acquisitions, including our acquisition of American Life Insurance Company and Delaware American Life Insurance Company, integrating and managing the growth of such acquired businesses, or arising from dispositions of businesses or legal entity reorganizations; (25) the dilutive impact on our stockholders resulting from the settlement of our outstanding common equity units; (26) regulatory and other restrictions affecting MetLife, Inc.’s ability to pay dividends and repurchase common stock; (27) MetLife, Inc.’s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and the applicable regulatory restrictions on the ability of the subsidiaries to pay such dividends; (28) the possibility that MetLife, Inc.’s Board of Directors may control the outcome of stockholder votes through the voting provisions of the MetLife Policyholder Trust; (29) changes in accounting standards, practices and/or policies; (30) increased expenses relating to pension and postretirement benefit plans, as well as health care and other employee benefits; (31) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (32) inability to attract and retain sales representatives; (33) provisions of laws and our incorporation documents may delay, deter or prevent takeovers and corporate combinations involving MetLife; (34) the effects of business disruption or economic contraction due to disasters such as terrorist attacks, cyberattacks, other hostilities, or natural catastrophes, including any related impact on the value of our investment portfolio, our disaster recovery systems, cyber- or other information security systems and management continuity planning; (35) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; and (36) other risks and uncertainties described from time to time in MetLife, Inc.’s filings with the SEC. MetLife, Inc. does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife, Inc. later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife, Inc. makes on related subjects in reports to the SEC.
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