A UK high court judge has blocked the proposed transfer of £12bn of annuities from Prudential to Rothesay Life in a highly unusual move that will raise questions about the potential for other big deals in the market.
Prudential agreed to sell the annuities to Rothesay, a private company backed by Blackstone and the Singaporean sovereign wealth fund, in March last year.
But the judge on Friday blocked the process, known as a Part VII transfer.
Prudential said: “We are disappointed by the High Court’s decision. The Independent Expert, who was appointed to report to the High Court, concluded the transfer would have no material adverse effect on the security of benefits or the reasonable benefit expectations of our policyholders. PAC and Rothesay Life have been granted leave to appeal the judgment by the High Court.”
The company said that the ruling would have no impact on the proposed demerger of its UK business, M&G Prudential, which is due to take place later this year.
It also said that policyholder benefits would be unaffected.
The transfer of the business had been preceded by a reinsurance contract between the companies covering the policies, which will be unaffected.
In a statement, Rothesay said: “The reinsurance transaction agreements contain provisions to address this outcome and whilst it is not the preferred or optimal outcome for either party, it will not have a material impact on Rothesay Life as a whole. Rothesay Life and [Prudential] are committed to a long-term relationship irrespective of the outcome of the proposed insurance business transfer.”