Deutsche Bank has agreed to sell Abbey Life to rival closed-book provider Phoenix Group in a deal worth £935m.
The deal is subject to regulatory approval, and will result in an expected pre-tax loss for Deutsche Bank of €800m (£688m).
Abbey Life will add £10bn of assets under management to Phoenix’s Book and around 735,000 policyholders.
Phoenix has been working on the acquisition since March, when it hired bankers to advise on the bid.
Abbey Life includes books of business from companies including London and Edinburgh Life, Excess Life, Target Life and Hill Samuel Life.
Abbey Life was among six firms to be referred to FCA enforcement earlier this year following a review of closed book firms.
Deutsche Bank chief executive John Cryan says: “We are pleased to have reached this agreement with Phoenix Group, a specialist life fund provider which is well qualified to serve Abbey Life policyholders.
“Deutsche Asset Management will continue to focus on its core businesses of active, passive and alternatives, while this transaction will also strengthen Deutsche Bank’s capital position. We continue to build a simpler and better Deutsche Bank.”
Phoenix Group chief executive Clive Bannister says: “This is a pivotal deal for Phoenix, giving us the platform and scale to continue as a leader in the consolidation of the UK life industry.
“This attractively-priced deal meets precisely Phoenix’s areas of strategic focus and stated acquisition criteria, whilst significantly increasing our cash generation and supporting a further increase in our proposed dividend.
“Furthermore, Abbey Life policyholders will benefit from stable ownership, improved service levels and a robust governance framework.”
In May Phoenix acquired the remaining part of Axa Wealth for £375m. The acquisition included Embassy, Axa’s off-platform investment and pension division, and its direct protection business Sun Life.