The new operation will be called Pacific Life Re; Sale is a "positive outcome" for Scottish Re says CEO Zippel
Pacific Life Insurance Company and Scottish Re Group Limited announced that a definitive agreement has been signed whereby Pacific LifeCorp, the parent company of Pacific Life, will purchase the International Life Reinsurance segment of Scottish Re Group Limited.
The new operation, to be called Pacific Life Re, provides reinsurance solutions to insurance and annuity providers in the United Kingdom and Ireland and to insurers in selected markets in Asia.
The purchase price is $71.2 million, subject to certain potential downward adjustments. Other terms of the purchase agreement were not disclosed.
The transaction is subject to regulatory approvals and other customary closing conditions, both of which are expected to be achieved during the third quarter of 2008.
"The purchase of Scottish Re's international business is a great opportunity for Pacific Life," said Pacific Life's chairman, president and CEO Jim Morris. "Scottish Re's international business has great growth potential and this transaction provides Pacific Life a practical way to access the growing UK and Asian markets. I am very impressed with the current management team and believe that their expertise, with the support of Pacific Life, will allow us to realise the growth potential that exists."
George Zippel, president & CEO of Scottish Re Group Limited, commented, "The sale of the International Life Reinsurance segment is a positive outcome for Scottish Re and is consistent with the revised strategic direction that we announced in February of this year.
"Under Pacific Life's ownership, David Howell and his talented team of professionals will have the opportunity to provide significant value to clients and deliver strong financial results to Pacific Life. We wish the entire Pacific Life Re team all the best."
As part of the agreement, the current management of the acquired companies will remain intact. Pacific Life Re, which will report to Mary Ann Brown, Pacific Life's senior vice president of corporate development, will be headed by David Howell and an executive team of 7 professionals with a combined 160 years of insurance and reinsurance experience in the UK, Canada, and Asia.
The headquarters of Pacific Life Re will remain in London, with approximately 80 employees in the UK and 15 employees in Singapore and Tokyo.
"This transaction is excellent news for our business and for our clients," said David Howell, future CEO of Pacific Life Re. "Pacific Life has an outstanding reputation for corporate excellence, customer focus, and financial strength and we are delighted to be joining such a highly-regarded company. The formation of Pacific Life Re will create exciting growth opportunities for our newly combined businesses and will provide our clients with the confidence and security they seek from a market-leading reinsurance partner."