Resolution to buy Abbey life funds for $6.7bn

LONDON: British insurance firm Resolution said it would buy the life insurance activities of Abbey National, the British bank owned by Spanish peer Banco Santander Central Hispano (SCH). The deal values Abbey’s life insurance businesses at £3.6 bn ($6.7 bn), Resolution and SCH said in separate statements issued to the London Stock Exchange.

Abbey added that it would now focus on the banking sector in Britain. In November ’04, SCH bought former British rival Abbey National for £8.5 bn in a deal that made it the world’s tenth-largest bank. Resolution said on Wednesday it would buy the British and offshore life businesses of Abbey together with the associated new business infrastructure and service companies.

The businesses include Scottish Mutual Assurance, Scottish Provident and Abbey National Life. The two offshore life companies being sold are Scottish Mutual International and Scottish Provident International Life Assurance.

The acquisitions will be funded partly with a £1.54-bn rights issue, will have an estimated value of £3.77 bn by the end of December ’06, according to Resolution’s statement.

Some 2,000 Abbey employees would transfer to Resolution as part of the deal.

Meanwhile Resolution has signed long-term distribution agreements to provide Abbey with Abbey-branded and Scottish Provident-branded life and pensions products.