Pension reforms prompt deal
‘Squeezed’ annuities groups unveil merger
Changes in the industry, introduced in April, removed the obligation to buy an annuity – or income for life – at retirement.
While bigger insurance groups have been able to absorb declines in sales of annuities, smaller specialists have struggled with the loss of a high margin product.
Just Retirement shareholders will own about 60% of the enlarged group, with Partnership shareholders taking about 40% after receiving 0.834 shares in the new company for each Partnership share held.
The deal is based on a Just Retirement share price of 199p and a Partnership price of 166p and will see the new company look to raise about £150m in fresh equity.
“Our two businesses will be bigger, stronger and more efficient together, which we believe will allow us to deliver better returns to both policyholders and shareholders,” said Tom Cross Brown, chairman of Just Retirement.