The Boots Pension Scheme buy-in brings L&G’s year-to-date global pension risk transfer business to £13.4bn. Credit: William Barton/shutterstock.com.

Insurer Legal & General (L&G) had agreed to a full buy-in of the pension scheme of UK high street retailer Boots for £4.8bn ($5.98bn), making it the largest single transaction in the UK of its kind by premium size.

The deal will secure the benefits of all 53,000 retirees and deferred members of the scheme.

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In a press statement, Boots said: “After exploring a range of strategic options for the scheme, an insurance transaction with Legal & General was selected as the best way to safeguard members’ benefits against market uncertainty, improved life expectancies and other risks and deliver Boots strategic objectives for the scheme.”

As per the deal, Boots will bring forward already committed payments of about £170m to the scheme. It also committed to pay £500m in extra contributions to the scheme.

Boots pension scheme chair of trustees Alan Baker said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures.

“We welcome the additional payment from Boots, in addition to the sum it has already committed. As a result, the Scheme will not be reliant on Boots to pay benefits to members and pensions will be protected for decades to come.”

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The buy-in brings L&G’s year-to-date global pension risk transfer (PRT) business to £13.4bn.

The deal is expected to enable a potential sale of Boots by its owner Walgreens Boots Alliance, according to a report by the Financial Times (FT).

In 2022, Walgreens abandoned its plan to divest Boots on the grounds of “unexpected and dramatic change” in market conditions.

However, Walgreens’ former CEO Rosalind Brewer was cited by the news agency as saying that the company could consider other deal options.

The company would “stay open to all opportunities to maximise shareholder value,” Brewer said.