Great-West Lifeco Inc. (TSX: GWO) announced today that its US subsidiary Empower Retirement signed a definitive agreement to acquire Prudential Financial’s full-service retirement business. The transaction value is reported to be at $4.45 billion.
The acquisition price includes $2.6 billion of capital to support the business. The company relayed that the transaction will be partly funded from US$1.15 billion limited recourse capital notes and US$1.0 billion short-term debt. The transaction will also be settled with both share purchase and reinsurance transactions.
Empower expects the acquisition to contribute approximately US$325.0 million in after-tax earnings by the end of 2023. This also projects Empower’s revenue contribution to Great-West Lifeco to grow to 30% in 2 years.
Prudential’s full-service retirement business has approximately US$314 billion in assets under administration. The acquisition will bring Empower’s base to over 16.6 million participants and assets under administration worth US$1.4 trillion.
Great-West Lifeco last traded at $36.56 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.