Goldman-backed Rothesay Life to acquire MetLife unit

By Warren S. Hersch

February 18, 2014 at 09:09 AM

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(Bloomberg) — Rothesay Life Ltd., the insurer run by Goldman Sachs Group Inc. Managing Director Addy Loudiadis, agreed to buy a U.K. annuity business with about 3 billion pounds ($5 billion) of assets under management from MetLife Inc.

The deal for MetLife Assurance covers benefits to more than 20,000 individuals in the U.K. and Ireland, according to a statement today from the companies.

Rothesay, whose investors include Goldman Sachs, Blackstone Group LP and Singapore's sovereign wealth fund, has been expanding in the retirement business as U.K. employers turn to insurers to handle obligations to former employees. The London-based insurer concluded 1.8 billion pounds of transactions since the beginning of last year, including pension deals with InterContinental Hotels Group Plc and Smith & Nephew Plc.

"Macro-economic and demographic factors are set to drive demand and Rothesay Life expects there to be further long term expansion in pension insurance buyouts and buy-ins," the London-based company said in the statement.

MetLife Chief Executive Officer Steve Kandarian has been scaling back from capital-intensive business lines like annuities, as he seeks to expand accident and health coverage and targets Asia and Latin America for growth. New York-based MetLife, the largest U.S. life insurer, will continue to provide employee benefits and wealth management in the U.K.

The deal is expected to be completed in the second quarter, according to the statement, which didn't disclose terms. MetLife's banker on the deal is Citigroup Inc., and the insurer got legal advice from CMS Cameron McKenna LLP. Rothesay used New York-based Goldman Sachs and Linklaters LLP.

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