Asda enters mammoth buy-in ahead of possible float
On the go: UK supermarket chain Asda has offloaded £3.8bn of its defined benefit liabilities in a buy-in with Rothesay Life.
According to Sky News, the company’s US parent, Walmart, made an extra contribution of close to £1bn to secure the deal, covering 12,000 members.
The deal could be followed by a full buyout and paves the way for a demerger and float of Asda in the UK, the broadcaster reports.
Bulk annuity transaction volumes have exploded in recent months, with a slew of multibillion transactions. Experts expect deals to easily exceed 2018’s total, itself a record-breaking year.
Charlie Finch, a partner at consultancy LCP, said: “This would be the 10th longevity transaction over £1bn so far this year, demonstrating the huge momentum behind the market as large companies such as Asda seek to derisk their pension plans.
“Last year there were five £1bn-plus transactions and only one the year before. We expect the market to top £35bn this year, up from £24.2bn last year.”
Asda did not respond to a request for comment by publication time.