ANNOUNCEMENT: UK Adviser is now PA Adviser. Read more.

Resolution to buy Axa’s UK life business

Resolution is to buy the UK life assurance arm of Axa in a deal worth around £2.75bn.


The deal will see Friends Provident and Axa integrated over the course of the next few months and, in early 2011 once the deal has completed, Friends Provident will be renamed Friends Life.

Axa will retain the majority of its wealth management business, which includes offices in the Isle of Man, the UK and Ireland, although the personal pension, income drawdown and onshore investment bond business will be sold as part of the deal.

Friends Provident chief executive Trevor Matthews (pictured) will lead the combined business as CEO, with Friends’ chief finance officer Evelyn Bourke taking on the new role of executive director of strategy, capital and risk.

Axa managing director of distribution services Paul McMahon and Axa’s managing director of protection Graham Harvey will be joining from Axa UK as managing director of corporate and managing director of individual respectively.

Axa Life CEO Paul Evans will become Axa UK deputy CEO, while Mike Kellard has been appointed CEO of the new AXA Wealth business and will be appointed to Axa UK Plc Board both subject to regulatory approval.

Resolution will pay Axa £2.25bn in cash with up to a further £500m in deferred notes. The deferred payment will be reduced if less than £1bn of the Axa reattributed inherited estate is available for release in 2011 – if none is available the total consideration will fall to £2.6bn. It will be financed by a fully underwritten rights issue of £2.05bn, Resolution shareholders having already sub-underwritten more than 52% of them.

Matthews said: “Today’s landmark deal combines two major players in the UK life and pensions market, both of which have a rich heritage.

“There is a good operational fit between both organisations. Bringing them together will make us one of the market leaders in our core businesses of protection and corporate pensions in the UK. This combined group will have a substantial offering in protection and corporate pensions products, and a real opportunity to deliver cost efficiencies allowing us to compete more effectively.”

Latest Stories