Guardian Financial Services is to acquire 300,000 in-payment annuities from pension fund consolidator The Phoenix Group.
Phoenix, will transfer approximately £5bn in assets to Guardian to meet all future payments to the annuity policyholders.
The deal will be completed in July.
The companies will then work together to transfer the policies to Guardian under Part VII of the Financial Services and Markets Act 2000.
Following the transfer, Guardian will manage approximately £13bn of assets on behalf of more than 600,000 customers.
Guardian chief executive Jonathan Yates said: "The transaction represents an important next step for Guardian as we pursue our closed life fund consolidation strategy in the European life insurance sector."
European private equity firm, Cinven, acquired Guardian in November 2011 in a bid to move into the UK closed life market. The acquisition provided it with a platform from which to execute a consolidation strategy in the sector.
Caspar Berendsen, partner at Cinven, said: "This transaction demonstrates that there are clearly opportunities for further consolidation in the closed life sector and we are well positioned to support the Guardian team given our significant track record in the financial services sector and the capital we have available."
RBC Capital Markets acted as financial adviser to Guardian.
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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