Pru selling full-service retirement business in $3.55B transaction

Empower Retirement has agreed to acquire Prudential Financial Inc.’s full-service retirement business in a deal valued at approximately $3.55 billion, the two companies announced Wednesday.

The deal between the Colorado-based Empower and Newark-based Prudential will see Empower acquire a unit that oversees more than 4,300 workplace savings plans, covering about 4 million plan participants with $314 billion in assets. The unit also has more than 1,800 employees who provide retirement recordkeeping and administration services.

“Today’s announcement is a significant milestone in Prudential’s transformation and the execution of our strategy to become a higher-growth, less market-sensitive, more nimble business,” Pru Chairman and CEO Charles Lowrey said in a prepared statement. “In Empower, we have found a partner that, like Prudential, is passionate about expanding financial opportunity for more people, and that has the scale and expertise to ensure the long-term success of the full-service retirement business.”

The transaction is expected to close in the first quarter of 2022, pending customary approvals and conditions. At the close, Empower will officially acquire Pru’s defined contribution, defined benefit, nonqualified and rollover IRA business, in addition to its stable value and separate account investment products and platforms.

Pru said it will continue to be part of the institutional and individual retirement market, through its Institutional Investment Products business, as well as through solutions provided by its Individual Annuities business and PGIM, a global asset management firm. Following the close of the transaction, Pru’s retirement business will include pension risk transfer, international reinsurance, structured settlements and institutional stable value product lines.

Pru said it expects to use the proceeds of the transaction for general corporate purposes.

Debevoise & Plimpton served as legal counsel to Prudential, while Lazard served as exclusive financial adviser. Eversheds Sutherland served as legal counsel to Empower, while Goldman Sachs & Co. LLC and Rockefeller Capital Management served as financial advisers.