The $1.265 billion deal, involving the assumption of $115 million in liabilities from Skandia, will see Prudential acquiring American Skandia’s $21.5 billion in annuity and $4.1 billion in mutual fund assets.
The move will boost Prudential’s total annuity assets under management from 14 th to 4 th in the US annuity marketplace.
Additionally, Prudential said the acquisition will allow it to sell its fixed annuity, mutual funds and life insurance products through the American Skandia distribution channel of independent financial planners.
The Swedish insurer has been struggling lately, as stock-market decline have cut into the demand for equity-based savings products. Skandia said it saw the sale as a way to improve margins while cutting debt and cash consumption, as it had seen lower growth and profits from its US products based on a difficult market and rating troubles, according to a Dow Jones report.
Final approval of the acquisition is contingent on various closing conditions, including regulatory approvals, filing under the Hart-Scott-Rodino Antitrust Improvements Act and approval by the boards of directors and shareholders of the mutual funds advised by American Skandia companies.