Great-West Lifeco To Buy Prudential Financial's Full-service Retirement Business In $3.55 Bln Deal

(RTTNews) - Great-West Lifeco Inc.'s (GWO.TO) U.S. subsidiary Empower Retirement agreed to acquire Prudential Financial, Inc.'s full-service retirement business for a total transaction value of about C$4.45 billion or US$3.55 billion. The deal value includes about C$2.6 billion or US$2.1 billion of capital to support the business.

Lifeco expects to fund the transaction with approximately US$1.15 billion of limited recourse capital notes and US$1.0 billion of short-term debt, in addition to existing resources.

Lifeco expects the transaction to be highly and immediately accretive to its earnings as a result of meaningful expected expense and revenue synergy opportunities.

Prudential's full-service retirement business covers 4,300 workplace savings plans, approximately four million participants and US$314 billion in assets under administration.

Prudential's full-service retirement business is expected to contribute approximately US$325 million after-tax earnings to Empower on a run-rate basis by the end of 2023, with high cash generation.

Empower expects to incur one-time integration costs of approximately US$170 million and deal costs of about US$55 million; integration is expected to be completed in 24 months. The transaction is expected to close in the first quarter of 2022.