Pearl is finally poised to win the battle for Resolution in a £5bn deal.
Last week, Resolution recommended Pearl’s acquisition bid to its shareholders after Standard Life withdrew its offer. The Pearl deal is set at 720p a share.
The transaction will create a a top 10 UK life business with £85bn in assets under management.
Pearl has entered into a binding agreement with Royal London which will see the mutual take over Scottish Provident and Scottish Provident International and some net assets and blocks of linked and protection in-force business.
Royal London is set to pay £1.267bn and provide £0.3bn of the debt funding for any offer to be made by Pearl.
Pearl will retain the majority of Resolution’s businesses, including Life Division South, Scottish Mutual International, Phoenix Pensions, Resolution Asset Management and Resolution Management Services.
Pearl is Resolution’s biggest shareholder with 25.9 per cent of the ordinary share capital. Pearl director Hugh Osmond says: “We want to combine the proven strength and expertise of both teams to create one organisation capable of delivering far more than either of its constituent parts. We believe that this will herald a bright future for policyholders, shareholders and employees of the combined group.”
Resolution chairman Clive Cowdery says: “Resolution welcomes both the value delivered to its shareholders and Pearl’s commitment to maintaining policyholder improvements. The board of Resolution is delighted to recommend this transaction, which creates a major UK insurer and an expert manager of closed funds. We wish Pearl continued success in this sector.”