Analyst Note| Rajiv Bhatia, CFA |
No moat-rated Great-West Lifeco announced on July 21 that its Empower subsidiary will acquire Prudential Financial’s full-service retirement business for a total transaction value of $3.55 billion. Through its acquisition of JPMorgan’s retirement unit in 2014 as well as recent acquisitions of Personal Capital and MassMutual's record-keeping business, Great-West has continued to focus on building out Empower. We generally approve of this strategy as we regard Empower as a potential moat enhancer, given the stickiness of record-keeping contracts. The deal is expected to close in the first quarter of 2022. We will maintain our fair value estimates of CAD 39 for Great-West and $89 for Prudential at this time.