Resolution hints at smaller acquisition deals to come

Resolution has hinted it may look to complete a series of smaller acquisitions rather than acquisitions of scale as it continues its consolidation of the UK life industry.

Resolution completed its acquisition of Axa’s UK life business in September, under its previous purchase Friends Provident.

The company’s acquisition of Bupa Health Assurance for a net consideration of £102m, announced in October, is set to complete in early 2011.

In a business update published today, Resolution says: “The Bupa transaction illustrates the multiple routes available to Resolution to complete the UK life consolidation project. These could include further scale transactions or a series of smaller bolt-on steps. (article continues below)

“Future transactions will be assessed using Resolution’s disciplined approach which continues to give greater emphasis to shareholder value creation over scale.”

Resolution’s stated aim is to have created a life insurer worth £10 billion by 2012/2013 and sold it off.

Total sales at Resolution for the first nine months of the year on an APE basis and including one month’s worth of Axa life sales were up 35% from £505m to £683m.

UK sales excluding Axa for the first nine months of the year were £294m. Including Axa for September, UK sales totalled £320m, compared with £296m for Friends Provident over the same period last year.

Resolution did not give trading figures for Sesame Bankhall Group, but says the business has “continued to trade profitably.”