Equitable Life put pensions at risk when it nearly collapsed in 2000. But 18 years on it has completed its turnaround with Life Company Consolidation Group (LCCG) agreeing to acquire the UK’s oldest life assurer for £1.8bn.
Equitable Life turned to Freshfields Bruckhaus Deringer, which fielded a team led by corporate insurance partner George Swan and included restructuring and insolvency specialists Neil Golding and Craig Montgomery.
‘This is the first time we’ve worked with Equitable Life,’ Swan told Legal Business. ‘We got asked to pitch in a beauty parade and thankfully we won it. It means it will be the first and only time we will do work for them!’
US firm King & Spalding advised LCCG. Corporate partner William Charnley led the team and was supported by employment partner Jules Quinn, regulatory partner Angela Hayes and tax partner Daniel Friel.
‘Equitable Life has a bit of history to it,’ continued Swan. ‘It’s spent the best part of 20 years gradually putting that history behind it. This deal is the culmination of that turnaround story.’
‘Equitable Life has a bit of history to it. It’s spent the best part of 20 years gradually putting that history behind it.’ George Swan, Freshfields Bruckhaus Deringer
Founded in 1762, Equitable Life is a savings, investment and pensions company based in London and Aylesbury and employing around 240 staff. It has more than 300,000 policy holders and manages assets of £6.3bn. On the verge of collapse, the company closed to new business in December 2000.
As a result of the sale, Equitable Life’s policy holders will transfer to Reliance Life, a subsidiary of LCCG.
‘The acquisition was a long one,’ continued Swan. ‘But it’s a good sign that these deals continue to be done because it provides value for policy holders.’
‘When the Equitable closed to new business in 2000, it was inevitable that at some point the society had to come to an end,’ said the company chief executive Chris Wiscarson in a statement. ‘The benefit of bringing Equitable to an end sooner rather than later is that we can capture for with-profits policyholders the near-record high values of the investments backing their policies.’
Policyholders will now be asked to vote on the arrangements to transfer to Reliance Life. Voting will take place in mid-2019, with the deal due to complete by the end of next year.