Swiss Re Confirms It Is In Early Stage Talks On Admin Re-Phoenix Group Merger

(RTTNews) - Confirming recent media speculation, Swiss Reinsurance Co. Ltd., known as Swiss Re, (SSREY), announced Friday that it is in early stage talks on a potential merger of its subsidiary Admin Re with Phoenix Group Holdings (PHNX.L). The deal is reportedly valued at about 3 billion British pounds or $4.5 billion.

The merger of the specialist insurance groups would create an industry powerhouse. Swiss Re noted that there is no certainty that these talks will lead to any transaction. It added that further statements on the talks will be made if and when appropriate.

According to the report, both Phoenix Group and Admin Re have similar market capitalization of 1.46 billion pounds. The deal will reportedly create a close rival in the U.K. to Resolution Ltd. (RSL.L), which currently has a market capitalization of 4.37 billion pounds.

The proposed merger will see the creation of a business with more than 100 billion pounds under management and nearly 10 million policy-holders. Phoenix Group currently has 68.6 billion pounds in assets under management and serves over 6 million policyholders.

The merger is anticipated to be structured is such a way that Phoenix would issue new shares to Swiss re that would result in Swiss Re becoming a major shareholder in the U.K.-based company.

The proposed merger plan shows the improvement in Phoenix Group's strategic and financial flexibility that positions it for further growth following a restructuring that saw it raise 250 million pounds of new capital from US hedge fund giant Och-Ziff in January.

Phoenix is reportedly being advised by Deutsche Bank, while Swiss Re has hired JP Morgan Cazenove to work on the potential merger deal.

In Friday's regular trading session, PHNX.L is currently trading on the LSE at 710.50 pence, up 57.50 pence or 8.81% on a volume of 0.86 million shares.

SSREY closed Thursday's regular trading session at $76.00, up $1.05 or 1.40% on a volume of 5,210 shares.