Allied Domecq scheme in monster buy-in

The deal is the largest ever buy-in to cover both deferred members and pensioners, with 27,000 members insured in total.

The transaction covers 10,000 actives and 17,000 pensions already in payment, and leaves the majority of the scheme’s promises now derisked.

Allied Domecq was advised by Hymans Robertson and DLA Piper, and Rothesay Life by Linklaters.

The former FTSE 100 company scheme is the latest in a string of large deals announced, as market capacity defies the limits some commentators had suggested.

On Thursday the GEC 1972 Plan entered into the UK’s largest ever full buyout, derisking £4.7bn of liabilities.

Rothesay Life’s investors have already contributed £500m of new equity to finance deals this month, but that will be extended by a further £200m in anticipation of further deals.

Its assets now exceed £50bn, more than doubling over the past year.

According to consultancy LCP, insurers’ half-year results show the bulk annuity market exceeded £34bn for the 12 months up to August this year, with most predicting the 2019 total will exceed this.

Lisa Arnold, chair of the trustees of the Allied Domecq Pension Fund, said: “This buy-in is a key step on a long journey of derisking taken by the fund, with strong support along the way from the sponsoring company. It represents a major achievement, improving security for all our members.”

Rothesay Life has also been attempting to grow its business via the purchase of a £12bn back book from Prudential, but found the transfer blocked by the High Court last week.

The insurer confirmed it will appeal the decision, although the case is unlikely to be heard for several months.

The company said: “We can confirm that we lodged our notice of appeal with the Court of Appeal on September 27 2019. Our appeal is on the basis that the judgment in the High Court contains material errors of law and should therefore be reconsidered.

“We have asked the Court of Appeal to set aside the judgment and sanction the transfer.”