Great-West Lifeco world headquarters is pictured in Winnipeg in this file photo.JOHN WOODS/The Canadian Press
Canadian insurer Great-West Lifeco Inc. is increasing its presence in the Irish insurance and investments market with the acquisition of Legal and General International Ireland Ltd. (LGII) The Dublin-based business focuses on high net worth clients in the U.K., offering investment and tax planning services. The business has 35 employees and terms of the deal weren't disclosed.
"The proposed transaction will enhance the position of Canada Life in the U.K., and give clients and professional advisers further confidence in our U.K. offshore business," said Paul Mahon, chief executive of Great-West, in a statement.
Two years ago, Winnipeg-based Great-West bought Ireland's largest life insurer in a $1.75-billion deal with the Irish government that signalled confidence in the European economy and Ireland's recovery.
This deal is much smaller. Doug Young, analyst at Desjardins Securities, estimates the acquisition is worth less than $200-million.
LGII opened for business in 2007 as part of London-based insurance and investment giant Legal & General Group PLC. The parent company decided this business wasn't essential to its operations and is selling "peripheral assets."
The key offering from LGII is offshore bonds, which have tax advantages for expats and other investors such as the ability to defer paying taxes until the bond is cashed in. They aren't guaranteed investments, and are typically held for many years.
LGII has built up about $4.74-billion in assets under administration in 4,000 U.K. offshore bond policies in about seven years.
Great-West's subsidiary Canada Life Group, which is the business that LGII will join, is already a provider of such investments.
"Canada Life is a highly regarded offshore bond provider and has been selling into the UK for over 27 years through its offshore companies, based in the Isle of Man and, more recently, also based in Dublin," Mr. Mahon said.
The company's existing assets under administration in its offshore business are three to four times larger than those in LGII's business.
The deal is expected to close in the second quarter of the year, pending regulatory and other approvals. Great-West is set to report fourth-quarter earnings on Thursday.