UK pharmacy chain Boots has agreed a £4.8bn pension fund buy-in deal with Legal & General which covers all 53,000 retirees and deferred members of the scheme.
According to a press release by the insurer, the transaction is the largest single deal by premium size in the UK, the most members taken on by Legal & General in a single deal.
Boots’ decision to offload its pension scheme is part of a more than two decade-long pension de-risking process by the retailer. Its 2001 switch of its asset allocation from equities to bonds made it the first pension fund to deploy a liability-driven investment (LDI) strategy.
Cardano was the strategic advisor to the pensions funds’ sponsor, US retail chain Walgreens Boots Alliance and the Dutch firm was also lead broker for the transaction. Baker McKenzie provided legal advice.
Aon was the trustees strategic adviser, lead investment adviser and broker for the transaction, with Sackers providing legal advice. Slaughter and May and Simmons & Simmons provided legal advice to Legal & General.
Legal & General has now written £13.4 billion of global pension risk (PRT) transfer deals so far in 2023. Transactions include a $610m buy-in with Deutsche Bank’s UK pension scheme and a $416m buy-in with Cable & Wireless’ UK pension fund.
The firm’s US arm teamed up with Reinsurance Group of America to provide a $300m PRT deal with PPG in June.