Herbert Smith Freehills has advised Pension Insurance Corporation (PIC), a specialist provider of insurance solutions for defined benefit pension funds, on the pension insurance buyout of the EMI group pension fund, which since 2011 has been a liability of Citigroup. The transaction covers £1.5 billion of liabilities and 20,000 members, and is the UK's largest ever pension insurance buyout. It enables the trustee of the EMI Group Pension Fund to insure all its liabilities with PIC, providing certainty to members and all parties involved.

Citi acquired music giant EMI in 2011 from Guy Hands' private equity group Terra Firma, as the bank had provided most of the funding when Terra Firma bought the company for £4.2 billion in 2007. Citi broke up EMI in 2012, selling off its back catalogue and ongoing record labels whilst retaining responsibility for the pension fund in order to make the package more attractive to bidders. This transaction with PIC removes the liability for the scheme from Citi.

The Herbert Smith Freehills team was led by pensions partners Samantha Brown and Roderick Morton assisted by associate Niamh O'Hagan. Partner Kristen Roberts and senior associate Ilze Vigo assisted on the financing aspects, with consultant Alison Matthews advising on insurance issues.
Samantha Brown commented: "This deal fully secures the pension benefits of 20,000 members and we are delighted to have assisted PIC in such a significant transaction, which achieved the objectives of all parties within a very short timeframe."

http://herbertsmithfreehills.com/news/news20130719-hsf-advises-on-uks-l…