Wednesday, 27 February 2013

Questions (90)

Michael McGrath

Question:

90. Deputy Michael McGrath asked the Minister for Finance the steps taken to engage with as wide a range of potential purchasers as possible prior to the sale of Irish Life to Great West Lifeco to ensure the maximum return to the State; and if he will make a statement on the matter. [10637/13]

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Written answers (Question to Finance)

I can advise the Deputy that a sale process was conducted beginning in mid-2011 in which 51 bidders were contacted about the opportunity to acquire Irish Life. Great-West Lifeco emerged as the preferred bidder for Irish Life following this process. However as a result of fears of a Eurozone break-up on the part of Great-West Lifeco, they withdrew their offer in late November 2011 and the process was suspended.

As the Deputy may be aware, since the bid process was suspended valuation multiples in the life assurance industry have improved, as have Irish bond yields, while the underlying life assurance industry in Ireland remains challenging, as outlined by Mark Burke, Head of Life Insurance Supervision at the Central Bank of Ireland in a speech on 31 January 2013 to a Life & Pension industry conference.

These circumstances allowed the State to recoup in full the investment made by the taxpayer in Irish Life and a valuation which was significantly better than could have been achieved if a sale had concluded early in 2012. A fair value opinion which supported the decision taken by the State was received from our advisors Goldman Sachs. The disposal proposed achieves a good valuation for Irish Life, an asset which the State did not intend to hold for the medium-term as the acquisition itself had been financed with borrowed money.

I believe the sale represents a very good deal for the Irish taxpayer.