Herbies and Linklaters act on Friends Provident mega-merger

Herbert Smith and Linklaters have landed key roles advising on the proposed merger of life office giants Resolution and Friends Provident.

The insurance firms, both members of the FTSE 100, are in advanced talks about merging to create an £8bn life office.

Herbert Smith, which has acted for both Friends Provident and Resolution in the past, is advising the latter in the current deal. The firm declined to comment but it is understood that corporate partners James Palmer and Malcolm Lombers are acting.

The firm last acted for Resolution when it bought Abbey’s life fund assets last year. Herbert Smith has also acted for Friends Provident in the past, most notably advising on its demutualisation in 2001.

At Linklaters, corporate partners David Cheyne and Owen Clay are representing Friends Provident. The firm declined to comment. The magic circle firm also had a role in Friends Provident’s demutualisation, acting for the company’s financial adviser Merrill Lynch.

The merger of the life offices, if agreed, would involve an all-share combination of the two groups. Friends Provident shareholders would own 49.1 per cent of the merged company while Resolution shareholders would own 50.9 per cent.

A statement from the companies said a merger is attractive because it would create value by combining Friends Provident’s new business growth opportunities with Resolution’s strong cashflow generation.

“This complementary fit also extends to products, customers, distribution,
financial profile and management,” they added.

It is likely that, if the merger goes ahead, the company’s asset management arms, Resolution Asset Management and F&C Investments, would also merge.