British insurer Legal & General Group has entered into an agreement to purchase the whole share capital of Lucida in a deal valued at nearly £151m from LCM Holdings.
Pending regulatory approval, including PRA and FCA, the acquisition of the shuttered UK company, with a portfolio of £1.4bn annuity assets will be completed by Legal & General Assurance Society (LGAS) during the third quarter of 2013.
The acquisition is part of the UK underwriter’s strategy to boost organic growth with bolt-on acquisitions, as the group has recognized retirement business as one of its five important themes for growth.
The acquirer anticipates that the deal will provide asset management and annuities administration synergies, which is likely to be accretive on earnings of Legal & General in its first year and exceeds its target return on economic capital.
Legal & General annuities managing director Kerrigan Procter said, "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."
Set up in 2006, Lucida, which is closed to new business, operated as an insurance company focused on the annuity and longevity risk business, including the defined benefit pension buyout market and the market for bulk annuities.
Founded in 1836, Legal & General has a market capitalization of £10bn, as of 25 June 2013 and delivers insurance, savings and investment management products in the UK.
The company services seven million customers in the UK for life assurance, pensions, investments and general insurance plans and almost one million customers in the US who depends on for life assurance.