BRITISH life insurer Phoenix is this morning expected to confirm it is discussing a £3bn deal to merge with a division of Swiss Re.
The FTSE 250 company, founded by Hugh Osmond, is in early stage talks to combine itself with Admin Re. Swiss Re could then potentially become a major shareholder in a merged listed company.
Both Admin Re and Phoenix are closed book insurers, meaning they buy up life insurance businesses that no longer accept new customers. They then attempt to combine the firms into a more profitable whole by cutting administration costs.
Phoenix, which was originally known as Pearl, declined to comment on the deal, which was first reported by Sky News.
In May Phoenix chief executive Clive Bannister told City A.M. that his company was considering a return to M&A activity after renegotiating part of its massive debt burden, acquired when it bought Resolution in 2008.
However, he warned consolidation in the insurance industry is “a bit like elephants in gestation – it takes a long time to come through.”