Merger talks between Resolution Life & Friends Provident

| July 24, 2007 | 0 Comments

Friends Provident, the UK’s 4th largest insurer and Resolution Life, the UK’s biggest manager of closed life funds, are said to be in the early discussions on a merger that could form an £8.3 billion organisation.

The two companies are seen as good contenders for such a merge as cash generated from Resolution’s book of life policies could be used to finance the expansion of a larger group.

Resolution has grown significantly, having recently acquired closed life business from Scottish Mutual, Scottish Provident, Abbey National and Abbey National Life. If the merger goes ahead, it would form a group larger than Standard Life.

Friends Provident employs 4,829 people and has offices in London, Dorking, Salisbury, Manchester and Exeter. Resolution is currently outsourcing some of its back office operations to Capita, which would leave 1,500 staff. Many are concerned that the merging of Resolution and Friends Provident would result in job cuts.

In the event of a merger, Friends Provident shareholders would own 49.1% of the new company, with Resolution investors holding the balance. In addition, other insurance companies, including Standard Life and Axa are interested in a merger with Resolution.

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