A merger between Irish Life and Irish Permanent is edging closer to a conclusion with a number of key management posts understood to have been agreed.
Irish Life chief executive, Mr David Went (41) is expected to become chief executive of the enlarged entity, with his appointment to be announced in mid-December, while Irish Permanent finance director, Mr Peter Fitzpatrick (46), will take charge of the finance role in the new company.
Irish Life's chief financial officer, Mr Stephen Shone, is - according to London sources - believed to have accepted a senior position in the UK insurance sector, leaving the way clear for Mr Fitzpatrick's appointment.
A role for Irish Permanent chief executive, Mr Roy Douglas (54) has still to be defined, but analysts believe he is likely to assume the role of chairman.
It is still unclear what, if any role will be filled by the current chairmen of either organisation. Irish Life chairman, Mr Conor McCarthy (65) joined its board in 1990 and Irish Permanent chairman Mr John Bourke (62), has been a board member since 1990.
The name of the new group is also under discussion. Analysts suggest that a holding company will be established, bearing a name such as Irish Life and Permanent through which the new group would operate. There would be some reluctance to drop either the Irish Permanent or Irish Life brand names given the huge investment in both of them in recent years. The new names will have to be approved by the Irish Stock Exchange and also by the Central Bank. A number of working groups comprising of representatives from both organisations are currently examining the structures and business mix across both companies to establish a blueprint for how the merger will work in practice.
Some overlap is inevitable between the two operations, particularly in relation to its life assurance operations, Irish Life Assurance and Irish Progressive. Other areas where there will also be some duplication of activities in its underwriting operations and also in its back office administration.
The institutions are working with their advisers to establish the respective valuations to be put on both companies and the precise structure of the deal. Irish Permanent is being advised by London corporate finance advisers DLJ Phoenix while Schroders is acting for Irish Life.
Details of the exact price at which the deal will be struck have yet to be decided and are likely to be among the final issues to be addressed in the current discussions.
Irish Life is capitalised on the Irish market at twice the size of Irish Permanent. Both companies have indicated that transaction will be concluded on terms broadly in line with recent relative market capitalisations of Irish Life and Irish Permanent. Irish Life is value at roughly £1.6 billion on the stock market while Irish Permanent has a value of around £800 million.
The boards of both organisations are expected to approve the deal in December. Following board approval, Irish Permanent will have to make a formal bid for Irish Life. Details of the bid will then be circulated to shareholders with an extraordinary general meeting expected to be called in April 1999.
