GE Capital's proposed purchase of National Mutual would see a fixed cash payment of around £500 to e...
GE Capital's proposed purchase of National Mutual would see a fixed cash payment of around £500 to each of the UK organisation's 160,000 members.
There would also be policy enhancements worth £290m for eligible with-profits policyholders to be distributed to them over time in the form of final bonuses.
It is estimated that the average payment for with-profits policyholders will be worth an additional £1,500. The deal is targeted to go through by April 2002 with the vote to be held at the end of 2001 or at the start of 2002, according to GE and National Mutual. Once National Mutual has demutualised it is to become a subsidiary of GE Capital and be a part of GE Life, the UK financial services subsidiary previously known as Stalwart.
An exact rebrand of National Mutual has not yet been decided although GE will be in the title. The business will continue to work exclusively through intermediaries.
Gavin Hill, managing director of National Mutual said the company would also continue to focus on the pre and at retirement market. He added: 'GE Life was interested in expanding further into the retirement market and this will complement our focus on income drawdown, self invested pensions and transfers with GE Life's existing set up providing bond products, equity release products and annuities.'
National Mutual's with-profits funds, which currently have money outsourced will be brought under the management of GE Life while index linked funds will continue to be managed by the outside fund managers. There will be an up-front payment of £235m by GE which will be used to finance the fixed cash payment to members with the remainder going into National Mutual's long term fund to improve financial security and investment flexibility for policy holders. Investment Week 25 June 2001
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