InterContinental joins in buyout boom with Rothesay Life deal

Michael Bow
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THE WORLD’S biggest hotel chain InterContinental Hotels yesterday offloaded its UK pension plan to Goldman Sachs-owned insurer Rothesay Life, adding further momentum to the UK’s buoyant buyout market.

The fiercely competitive deal, which saw a number of other life insurers providers pitch for the business, will see Rothesay take responsibility for the future pension payments of about 3,000 current and former InterContinental workers.

A £440m pot of shares, bonds and others assets owned by the InterContinental pension scheme will transfer to Rothesay to help pay the benefits.

The buyout follows Rothesay’s £280m bulk annuity transaction with defence contractor Cobham last month and a similar deal with FTSE 100 firm Smith & Nephew in May – with more expected to come.

The pension risk transfer market is heating up after a busy summer of activity.

July saw a jumbo £1.5bn buyout of the EMI pension scheme and risk transfer volumes have already surpassed those recorded in 2012.