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THE GOVERNMENT HAS said it has reached a deal to sell Irish Life to the Canadian company Great-West Lifeco for €1.3 billion.
The Irish Life name will be retained as part of the deal and the life and pensions operations of Great-West Lifeco’s Irish subsidiary, Canada Life, will be combined with those of Irish Life.
Irish Life said that the terms and conditions of customers’ policies will not be impacted by the change in circumstances. It is understood that staff at the firm are being briefed today about the sale.
The government says there will be an additional dividend of €40 million being paid to the State prior to the completion of the deal which is conditional on regulatory approvals.
The Department of Finance said these were “customary in a deal of this nature”.
The sale brings an end to the government’s long-running bid to sell off the profitable life assurance arm of the Irish Life and Permanent group which was split from the troubled Permanet TSB in 2011 when PTSB required €4 billion in State capital.
A total of €2.7 billion was pumped into the bank at the time of the takeover and the government had been expecting to raise €1.3 billion once the sale of Irish Life was completed.
A previous deal with Canada Life/Great-West Lifeco collapsed in November 2011 amid concerns from the prospective buyer about the eurozone crisis.
“Today’s deal is the first time during this crisis that a company in which we have invested has been returned fully to private ownership,” Finance Minister Michael Noonan said today.
“This is a historic transaction and provides the Irish taxpayer with a full return on its investment in Irish Life.”
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Noonan has stated the government has recouped it’s entire investment in Irish Life.
An additional dividend of €40 million is being paid to the State.
Considering Michael noonan has said that inflation is going to consume our national debt …then selling Irish Life at the same price as it paid for it a year or so ago then by definition and using the minister’s own economic outlook then this is a loss;…….. without index-linking ….
If you red flag this comment then you don’t understand economics ! ……..but work away ..red flag all you want because then we’ll know how many trolls are here!
I was gazumpted with an offer of €1.25 billion
Any move with a financial institution is not in the best interest of the people of this country ,history will not be kind to this goverment and its predecessor .
Some write off. Losing 3 billion! Nothing to be proud off
They haven’t lost 3 billion. Irish Life was purchased by the minister of finance
Permanent TSB required the €4bn bailout! Not Irish Life on it’s own. Good return considering present state of the sector in Ireland at present.
They haven’t Irish life and permanent was made up of Irish life (pensions) and permanent tsb (bank) … The state has sold Irish life only and still owns permanent tsb and their assets …
Ha Ha Irish LIFE.
http://moneypenny.150m.com/
Was it Irish life itself that required the 4bill bailout or was it the entire group?
The entire group. Irish Life were and still are a very profitable company
Alan, so in effect we have sold off the cream
And the state needs to hang on to it for what reason exactly Shay? The state does not need to own insurance companies any longer, time to get rid of VHI also.
Thought it was the group ok, that’s a win on the Irish life front so.. now to see how we can limit losses on permanent tsb.
Ok reg, but a lot easier regulate if you own it , and it was only one company out of many, so competition wasn’t an issue, accept an post are still involved in part of the industry
Why do people still believe privatising is the answer , I for one believe competition is the answer but that doesn’t exclude the state from competing also
I can understand state owned companies where there are no real private sector alternatives Shay, and there is an argument why some industries should not be privatised. This is certainly not the case with insurance companies in this country any longer, there is choice and competition. An post still provide a fairly unique service in relation to general postal services. I’m not sure why you would need to own something to make it easier to regulate.
Easier to understand what’s going on if you own it, accept not really an argument in reality , just asking questions to try and grasp what’s going on
The whole problem started when they moved the goal posts for the stress tests.. Despite the massive anchor of ptsb the Group was well set to survive unaided. Be interesting to see what the end result is for IL; it’s very inefficient in terms of staff and has an ingrained PS mentality. wouldn’t be surprised if there will be big job losses.
Hi Padraig, what do you mean by “it’s very inefficient in terms of staff and has an ingrained PS mentality.”?
Hi Stephen. I mean morning and afternoon tools-down tea breaks. I mean promotion by length of service not performance. I mean company policy not to give staff poor reviews for fear of union backlash. Too many people doing not enough work. Basically Like the PS was when it left. GW are no mugs they will see the cost cutting oppurtunuties.
Cheers Padraig. I work in Irish Life and this has been an education. Between my new found tea breaks I’ll be asking my boss to give me the best rating possible or else I’ll go on strike. I’ll also be expecting a promotion in the next few weeks or else I’ll go on more tea breaks.. I mean more strikes. I also get to go home earlier from now on. This is great!
I worked there too Stephen, obviously we saw different side. sounds like you either got lucky/unlucky (depending on how you look at it!) or haven’t been there long enough to be assimilated. Good luck, hope they don’t slash & burn as they with previous “merges”
Irish Life wasn’t really “split” from the group.
It was a valuable, profitable asset for the group. Noonan forced the bank to accept an overcapitalisation so the government could get their hands on the Life assurance part.
Now they have gotten their money back and all the shareholders (the majority of which are pensioners) are left with nothing.
So they wont be needing the billion from the nurses garda ambo’s and fireys then………..?
Why didn’t they keep the Property portfolio as payback for the Taxpayer?
Stephen
Irish Life didn’t have any property in its portfolio.
An we received a full ROI. That’s a win.
There’s a difference between property owned by the company and property owned on behalf of policyholders. I suspect (without looking) that most if not all of the property on Irish Life’s balance sheet is held on behalf of policyholders. So Ireland Inc wouldn’t be able to seperate it as part of any deal.
On the ball as usual Paddy/Richard good man!
rogers the goverment stooge selling their untruths.
Every day I’m shuf shuffling (statue)
Clearly its gangam style.
Is it just me or does this sentence make any sense? Pumped in and further?
A total of €2.7 billion was pumped into the bank with a further €1.3 billion expected to be raised from the sale of Irish Life.
I suspect the 1.3bn is being used to prop up PTSB, rather than straight to the NTMA. Perhaps Hugh can clarify.
No messing with that money now Noonan – give it to the Germans and reduce our interest rates. Then again, we probably cant do that any more.
have your say