Legal & General Group has agreed to acquire the entire share capital of Lucida, a closed UK annuity buy-out company with a portfolio of £1.4 billion of annuity assets, from LCM Holdings for an estimated consideration of £151 million.
Subject to Financial Conduct Authority and Prudential Regulation Authority approval, the acquisition by the group’s subsidiary Legal & General Assurance Society is expected to be completed in the third quarter of 2013.
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Established in 2006, Lucida was primarily focused on the bulk purchase annuity market. It implemented bulk annuity arrangements with the Merchant Navy Officers Pension Fund, New Ireland Assurance and the UK pension schemes of Morgan Crucible and Newell Rubbermaid. Lucida closed to new business in November 2012 and is currently responsible for over 31,000 pensions in payment.
Legal & General stated that the acquisition forms part of its strategy of accelerating its organic growth via bolt-on acquisitions. The acquisition will be funded from surplus capital held within the group.
Kerrigan Procter, managing director annuities of Legal & General, said: "We identified retirement solutions as one of our five themes for growth, and I’m delighted today to be able to announce our first acquisition in this arena.
"This acquisition will benefit Lucida’s customers, by providing them with the comfort of knowing their pensions will be paid by a longstanding, trusted and well capitalised business. Legal & General’s annuity business has over 700,000 customers who rely on it for their pension income, and manages over £33 billion in assets."
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