Empower Retirement is acquiring the retirement plan business of Prudential Financial Inc. for $3.55 billion, the record keeper said in a news release Wednesday.
The acquisition will increase Empower’s reach to more than 16.6 million participants and assets under administration to $1.4 trillion on behalf of 71,000 workplace savings plans.
The deal, which includes Prudential’s defined contribution, defined benefit, non-qualified and rollover IRA business, as well as its stable value and separate account offerings, is expected to close in the first quarter of 2022 pending regulatory approvals.
In the news release, Empower touted the pending acquisition as a way to expand services to a broadening spectrum of corporate and non-profit defined contribution plans, as well as government and Taft-Hartley plans.
“Empower and Prudential share a commitment to serving the financial needs of working Americans, their advisers and employers. This transaction will create an even stronger service organization at Empower, fueled by technology and the expertise of our deep talent pool,” said Edmund F. Murphy III, Empower’s president and CEO, in the news release.
“We will continue to leverage our scale and resources to challenge the status quo and be uniquely positioned to serve the retirement and wealth management needs of millions of retirement savers in every phase of their financial journey,” he said.
It is the second major record-keeper acquisition for Empower Retirement in as many years. Its $3.35 billion acquisition of the retirement plan business of Massachusetts Mutual Life Insurance Co. closed Jan. 4.
Prudential’s retirement plan business serves over 4,300 workplace retirement savings plans with about 4 million participants and about $314 billion in assets.
“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,” said Charles Lowrey, Prudential’s chairman and CEO, in the news release.
“In Empower,” Mr. Lowrey said, “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.”
Following the deal’s close, Prudential’s remaining retirement business will consist of pension risk transfer services, international reinsurance, structured settlements and institutional stable value wrap offerings.