Swiss Re announced the sell of a 6.6% stake in Phoenix Group Holdings plc for £437 million ($608 million).
After the sale, which is expected to close on June 25, Swiss Re will still retain another 6.6% stake in Phoenix, which is the UK’s largest long-term savings and retirement business. Swiss Re originally acquired the shares when it sold its UK life subsidiary, ReAssure Group, to Phoenix in 2020.
“The sale was done in the context of a regular review and rebalancing of Swiss Re’s investment portfolio and is consistent with the group’s overall investment strategy across equity and alternative investments,” said the reinsurer in a statement.
It is currently estimated that the transaction will result in a low single-digit increase in the group’s Swiss Solvency Test ratio. The impact of the transaction on Swiss Re’s U.S. GAAP earnings is not expected to be significant.
The reinsurer has agreed to a lock-up period of 90 days following closing, with respect to its remaining stake in Phoenix (which means that Swiss Re has agreed not to sell these shares for at least three months).
Moody’s Investors Service analyst Dominic Simpson commented that the ratings agency views the deal as credit positive because “it will reduce Swiss Re’s asset concentration and have a small positive impact on its solvency.”
Source: Swiss Re and Moody’s
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