PENSIONS giant Phoenix Group is set to snap up life insurance firm Sun Life UK in a cash deal worth £248m, the firm announced yesterday morning.

In a statement, bosses said the deal would be funded entirely off its own books and could provide a boost of £470m incremental long-term cash generation, with around 30 per cent of that to emerge in the first three years.

Phoenix Group, which has around £310bn in assets under management, has been eyeing up a spate of deals to bolster its heritage business and said that Sun Life UK represented about £10bn of the estimated £480bn of M&A opportunities in the market.

Boss Andy Briggs said the deal showed 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 £470m, inclusive of cost and capital synergies," he said. "This supports a 2.5 per cent dividend increase, in line with our ambition to sustainably grow our dividend over time."

Phoenix said that is had also now agreed a new long-term strategic asset management partnership with Sun Life that "complements our existing relationships", with bosses saying they are now set for more deals with M&A a "strategic priority" for the period ahead. Regulators are now assessing the deal, with completion expected in the first quarter of 2023.

(c) 2022 City A.M., source Newspaper