Empower Retirement says it’s acquiring Prudential Financial’s full-service retirement business in a deal valued at $3.55 billion.
Empower will add Prudential’s retirement plan recordkeeping and administration business, which includes more than 1,800 employees that help oversee more than 4,300 workplace savings plans representing around 4 million plan participants and $314 billion in assets, according to Empower.
The deal is expected to close in the first quarter of 2022, Empower says.
As part of the deal, which will be supported by $2.1 billion of capital through a combination of the balance sheet of the transferred business and Empower capital and surplus, Empower will acquire Prudential’s defined contribution, defined benefit, non-qualified and rollover individual retirement account business as well as its stable value and separate account investment products and platforms, according to Empower.
According to Empower, the acquisition will help retirement plan participants while allowing the company to expand its services to a broader range of workplace savings plans.
Empower CEO Edmund Murphy says around 95 employees will lose their jobs as part of Empower’s acquisition of Prudential’s retirement business, FA-IQ sister publication Ignites reports.
Prudential, meanwhile, plans to stay on in the institutional and individual retirement segment, serving retirees, annuitants and employers through its Institutional Investment Products unit and offering income and investments services through its Individual Annuities business and its asset management arm PGIM, according to Empower.
Denver-based Empower says it administered around $1 trillion in assets for more than 12 million retirement plan participants as of the end of March. The firm has gone an aggressive acquisitions spree last year, as reported. And its $3.35 billion acquisition of MassMutual’s $167 billion plan administration business was the second largest deal last year, according to Echelon Partners.
The Prudential acquisition, meanwhile, will bring Empower’s participant base to 16.6 million and its retirement services recordkeeping assets to roughly $1.4 trillion, administered in around 71,000 workplace savings plans, according to the firm.
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