British insurer Prudential plc (LON:PRU) said on Wednesday that its fully-owned unit Jackson National Life Insurance Company had closed the buy of US life insurer SRLC America Holding Corp from parent Swiss Re Ltd, after securing all needed regulatory nods.
Prudential paid GBP418m (USD663m/EUR529m) for SRLC, above the GBP398m price announced at the agreement on 31 May, it said, adding that the initial price was based on an estimated balance sheet for the target, while the current price is based on an update of that estimate. The price could still be adjusted to reflect potential differences between the estimated balance sheet immediately before completion of the deal and the actual balance sheet at completion, the buyer said.
The bolt-on deal serves Jackson’s strategy to boost scale through a capital efficient move, president and CEO Mike Wells said in a comment in May.
The acquisition will immediately add to Prudential IFRS and EEV earnings, while contributing an estimated GBP100m to Jackson’s IFRS pre-tax earnings in the first year of ownership, the buyer has said.
By increasing Jackson’s profits from insurance income, the addition of SRLC will diversify Prudential’s earning base, the British group said.
The buyer said it would use existing cash reserves to finance the acquisition.
SRLC is a life insurance business within the US division of Swiss Re’s Admin Re, deriving earnings from long-duration cash flows generated mainly from life, whole life and basic universal life products