|Irish Life headquarters, Dublin. Photo: Aramark Property|
Minister for Finance today announced that an agreement has been reached with
Great-West Lifeco (Canada Life) for the sale of Irish Life for €1.3bn with an
additional dividend of €40m being paid to the State prior to completion.
agreement is conditional, most notably on receipt of regulatory approvals, which
are customary in a deal of this nature.
the agreement, Minister Noonan said: "The Irish economy is entering its third
consecutive year of growth, our deficit is on a downward trajectory and we are
beginning to attract the levels of investment required to create jobs and to
make a full return to the markets. This progress was one of the reasons that
led Great-West Lifeco to renew their interest in late November 2012, almost a
year to the day after they previously withdrew."
Lifeco’s Irish business, Canada Life (Ireland), is already a significant
employer and is the largest Canadian employer in the State. Noonan said €10bn
has been invested or committed in the past six months, mainly by international
investors, in transactions managed by the State or entities controlled/owned by
manages approximately 1m policies, with over €37bn of assets under management
and employs 2,200 people in Ireland.
Canada Life has over 150,000 customers in
Ireland and was established in Dublin in 1903.
Irish Life was created in 1939 by amalgamation of nine British and Irish
insurers. The Irish State had an 18% stake and it was raised to over 90% in
Irish Life floated on the London and Dublin stock exchanges in a privatisation in
1991 and in 1999 a merger with Irish Permanent was agreed to form Irish Life & Permanent.
In 2011, most of IL&P's shares were acquired by the State as part of a
recapitalisation. In 2012 Irish Life spun was spun-off as separate entity.
``I have no doubt that Irish Life is a much better and more efficient company
for having been privatised,'' David Kingston, the company's
retired chief executive, told The Irish Independent in 1998.
``That's because the transformation not only brought the disciplines of the
market to bear on the company and its operations but also because all the staff
became significant shareholders in their own right and became incentivised to
push the business forward as a result."
a €1.3bn cash injection would, combined with the Bank of Ireland Contingent
Capital deal, and all other things being equal, would reduce the GGD (general
government deficit) ratio to GDP from 121.3% at end 2013 (per Budget 2013) to
119.9%. As the acquisition did not constitute a capital transfer it will not
have an impact on the GGB but the €1.3bn will positively impact the Exchequer
The €10bn worth of investment referred to by
Noonan is made
up as follows
Bank of Ireland CoCos
Bank of Ireland Covered
Bank of Ireland Subordinated
Covered Bonds (€1bn),
Tap of 2017 Bond (€2.5bn)
NTMA Treasury Bill Programme (€0.5bn)
ESB Bond (€0.5bn),
Bord Gais Bond (€0.5bn),
4G Licences (€0.9bn),
NTMA SME Equity Fund (€0.2bn),
SME Turnaround Fund (€0.05bn),
SME Credit Fund (€0.2bn).
Check out our
, at a low annual charge of €25 - - if
you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to
support the service.