Phoenix Group Holdings said on Friday it would buy the British insurance unit of Swiss Re in a cash-and-shares deal worth £3.2 billion ($4.1bn). Phoenix Group, Europe's largest owner of life assurance funds closed to new customers, said the acquisition of ReAssure is expected to bring in additional cash flows of about £7 billion over time. Swiss Re said it would get a cash payment of £1.2 billion and a stake in Phoenix of 13 per cent to 17 per cent. ReAssure's minority shareholder, MS&AD Insurance Group Holdings, will receive shares in Phoenix representing an 11 per cent to 15 per cent stake. Swiss Re estimated the transaction, expected to close in mid-2020, would have a positive impact on its Group Swiss Solvency Test (SST) ratio and economic profit and a negative impact on its US GAAP results in the fourth quarter of 2019. The Zurich-based company in July shelved its plans for a $4.1bn flotation of ReAssure, citing weak demand from institutional investors. Swiss Re, the world's second-largest reinsurer, had wanted to spin off ReAssure to put the business under a more favourable regulatory regime and give it easier access to capital to fund its expansion. The closed book insurance business deals in policies that are shut to new customers and where scale is important to generate profit.