State sells Irish Life for €1.3 billion

Irish Life, the State-owned life assurance and pensions company, has been sold to Canadian life insurer Great-West Lifeco for €1.3 billion.

An additional dividend of €40 million is being paid to the State prior to completion, and the deal is conditional on regulatory approvals.

Minister for Finance Michael Noonan said: "Today’s deal is the first time during this crisis that a company in which we have invested has been returned fully to private ownership. This is a historic transaction and provides the Irish taxpayer with a full return on its investment in Irish Life".

Irish Life manages approximately one million policies, with over €37 billion of assets under management and employs 2,200 people in Ireland. In addition to the core life, pension and investment businesses Irish Life also has the following subsidiaries; Cornmarket (100%) — Ireland’s largest independent broker which specialises in affinity arrangements for public service employees; IPSI (100%) — an outsource provider of life administration services to international life companies. It has also invested in the following joint ventures; Allianz (30%) — Ireland’s 3rd largest non-life / general insurance business; and Glo Health (49%) — the newest entrant to Ireland’s private health market.

Following the transaction the Irish Life name will be retained and the life and pensions operations of Great-West Lifeco’s Irish subsidiary Canada Life (Ireland) will be combined with the operations of Irish Life. The customers of both organisations will have continuity of products and customer services under Irish Life, a spokesman for Irish Life said.

Describing the deal as "transformational", Irish Life chief executive Kevin Murphy said that the acquisition by Great-West Lifeco provided Irish Life with a parent with "financial strength and stability".

"Great-West Lifeco is one of the outstanding global players in the life and pensions business with €417 billion assets under administration and an AA (very strong) rating. Through Canada Life, Great-West Lifeco has a long association with Ireland stretching back over 100 years."

"Their financial strength and longstanding commitment to the Irish market makes them a wonderful fit for Irish Life. They will underpin our position as the leading force in the life, pensions and investment management business in Ireland. We look forward to working with our future colleagues in Canada Life Ireland to create a world-class business," Mr Murphy added.

Great-West Lifeco came close to acquiring Irish Life in late 2011 but pulled out amid concerns about the euro zone financial crisis. The Government then bought the insurer for €1.3 billion in June from debt-laden lender Irish Life and Permanent. Negotiations with Great-West Lifeco recommenced in December.

Speaking today, Allen Loney, President and chief executive officer of Great-West Lifeco said: "This transaction affirms our long-term commitment to Ireland, where Canada Life has operated since 1903. Customers of both companies will have continuity of their products and customer service. The acquisition of Irish Life is transformational for our companies in Ireland. It allows us to achieve — with a single transaction — the leading position in life insurance, pensions and investment management, and is consistent with Great-West Lifeco's global business strategy of developing significant market positions in the sectors where the Company participates."

"There is a good culture fit," Mr Loney added noting that Irish Life has a strong brand with a broad product offering and wide, multi-channel distribution, similar to Great-West Lifeco's operations in Canada.

(Additional reporting PA)