According to reports in several newspapers, GE Capital, the financial unit of General Electric, is set to acquire Scottish Life, one of the last remaining mutual life insurance companies in Scotland for an estimated £2 billion ($2.8 billion).
Following on the heels of Abbey National’s acquisition of Scottish Provident last week for £1.8 billion ($2.5 billion), GE apparently stepped up its efforts to enter the U.K. life and pensions market. Earlier reports had indicated it was also interested in Equitable Life, which is being sold following a court decision requiring it to pay costly pension and annuity claims.
Scottish Life has over $14 billion under management and a well developed distribution system, specializing in the sale of group pensions to small and medium size businesses through independent financial advisors (IFA’s). Analysts speculated that, although GE was apparently paying a high price, the value of the IFA network to market other GE products might make it justifiable.
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