Rachel Reeves' endorsement of Brookfield's takeover of Just Group: A misguided approach to promoting British business?

Rachel Reeves, the UK Chancellor, has praised the £2.4bn takeover of pension consolidator Just Group by Brookfield, despite the deal being an "own goal" for the UK. Brookfield is a private equity firm that uses debt financing, and the takeover is the 10th of over £1bn this year, with £25bn worth of assets set to leave the FTSE indexes. The Chancellor's support is seen as misguided, as it sends a message that Britain is open to foreign takeovers of its listed companies.

In a significant move, Brookfield Wealth Solutions (BWS) has acquired Just Group, a leading British life insurer, in a transaction valued at £2.4 billion ($3.2 billion). This deal, announced on July 31, 2025, is part of BWS's expansion into the UK pension risk sector [2].

The acquisition will see Just Group merged with Blumont Annuity Company, a subsidiary of BWS that recently received FCA approval to launch a new insurance company in the UK. This strategic move aims to capitalize on the growing demand for de-risking solutions among pension schemes in the UK [2].

The deal is being legally advised by Allen Overy Shearman Sterling (A&O Shearman) on behalf of Brookfield Wealth Solutions, while Slaughter and May represents Just Group [2]. The acquisition is expected to complete in the first half of 2026, subject to shareholder and regulatory approval [2].

Brookfield Wealth Solutions, a unit spun off from Canadian multi-national asset management giant Brookfield Corporation in 2021, has identified defined contribution pensions as a key area of growth post-acquisition. The company aims to strengthen Just Group's existing presence in the defined benefit buyout market [2].

The UK bulk annuities market has seen record demand, with transaction volumes reaching £47.6 billion in 2024. This acquisition marks a strategic move by Brookfield to secure a stronger position in one of the world’s most attractive pension and insurance markets [1].

However, the acquisition has sparked concerns among investors and regulators. The UK Chancellor, Rachel Reeves, has praised the deal, viewing it as a positive development in the context of increasing foreign investment in the UK. Yet, critics argue that the deal is an "own goal" for the UK, as it sends a message that Britain is open to foreign takeovers of its listed companies [4].

The acquisition is also notable for its use of debt financing. Brookfield has agreed to fund the acquisition through new debt financing provided by the Royal Bank of Canada [3]. This approach has been criticized by some analysts who question the long-term sustainability of such financing strategies.

Despite these concerns, the acquisition is expected to have a positive impact on the UK insurance market. With Brookfield's backing, Just Group plans to strengthen its position, which could positively influence competition and innovation within the sector [4].

In summary, Brookfield's acquisition of Just Group is a notable development for both companies and the UK market. The support from government officials highlights a concerted effort to attract long-term capital into the country, despite concerns over market departures.

References
[1] https://citywire.com/wealth-manager/news/just-acquired-for-2-4bn-by-newly-launched-brookfield-insurer/a2471215
[2] https://usaherald.com/ao-shearman-guides-brookfield-on-2-4b-just-group-buy/
[3] https://www.marketscreener.com/news/brookfield-wealth-solutions-ltd-agreed-to-acquire-just-group-plc-from-a-group-of-shareholders-for--ce7c5fddd980f026
[4] https://insnerds.com/news/brookfield-strikes-2-4bn-deal-to-buy-london-listed-insurer-just-group