Closed book consolidator Phoenix is to acquire Abbey Life from Deutsche Bank for £935m.
The deal was announced to investors on 28 September. It will add £10bn of assets under management and about 735,000 policyholders to the six million strong group.
Phoenix will fund the buyout through a £735m rights issue and a £250m bank loan.
Phoenix said the purchase was a "compelling opportunity" in line with its strategic focus. It expects it to generate £0.5bn of aggregate cashflows between 2016 and 2020 rising to about £1.1bn from 2021 onwards.
CEO Clive Bannister said: "This is a pivotal deal for Phoenix, giving us the platform and scale to continue as a leader in the consolidation of the UK life industry.
"This attractively-priced deal meets precisely Phoenix's areas of strategic focus and stated acquisition criteria, whilst significantly increasing our cash generation and supporting a further increase in our proposed dividend."
The deal follows Phoenix's acquisition of Axa Wealth's pension business in May.
The firm said the deal would deliver "clear benefits" for Abbey Life clients. "We believe this is a good deal for Abbey Life policyholders. At Phoenix, we focus on one thing - closed funds - and we employ highly talented people with particular expertise in closed life funds that means we can improve outcomes for policyholders," it said.
"We will invest heavily to ensure these customers are integrated into our business and minimise any impact to their customer service."
However, last year an adviser detected a pricing blunder in a number of Phoenix's life and pension funds, leading to the firm having to review its range. It said at the time it would notify customers of any pricing adjustment and would reimburse them retrospectively.
Phoenix hopes to finalise the Abbey Life deal by the end of the year. The prospectus will be published during early October, followed by a shareholder vote at the October general meeting.
The Axa transaction is on track to complete in November following regulatory approval, Phoenix said.
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