Electrification and automation technology firm ABB has completed a £700 million bulk purchase annuity pensions buy-in deal for its UK scheme.
The transaction, which was completed last month, secures the benefits of more than 4,450 pensioner members and over 2,900 deferred members. It also included a £620 million in-specie asset transfer of UK and US corporate bonds and UK gilts.
ABB stated that its objective from day one was to reduce worldwide pension risk as part of its global strategy, and that the UK buy-in was a significant milestone in achieving this.
The trustees were advised by Willis Towers Watson, who led the transaction process, while LCP was the lead transaction adviser to the firm. Legal advice was provided by Eversheds.
Lee House, pension management at ABB, said: “Following a collaborative process working with the trustees, we are pleased to have completed a full buy-in for all liabilities of the ABB plan and provided further security of members’ benefits. This is a hugely successful outcome for us as part of our pension strategy and corporate objectives. ABB wishes to thank the trustees and the advisory teams for their support in navigating this important project.”
Carolan Dobson, chairperson of the ABB plan, added: “The trustees are delighted to have completed a buy-in with Aviva which covers all our members’ benefits, giving them the additional security provided by a well-capitalised and highly regulated insurance company. This is the fruition of several years of careful planning and we are delighted that the buy-in is now completed.”
Julie Priestley, secretary to the trustees, said: “Ensuring a smooth transition for the plan and its members was a key priority throughout this process. Thanks to the strong collaboration between the trustees, the firm and our advisers, we were able to deliver this complex transaction seamlessly and with confidence.”
Ricky Patel, partner at LCP, added: “We’ve thoroughly enjoyed advising ABB on all aspects, from the overarching strategy to the pricing, contract negotiations and asset transfer. Now the buy-in is complete, ABB’s position is future-proofed across key areas, and the residual pension exposures much reduced.”
