Insurance sector player, Legal & General has said that it is planning to acquire Lucida that manager of annuity funds of pensioners in a deal valued at £151 million.

The acquisition will allow Legal & General to expand its presence in the retirement business with access to thousands of pensioners of Lucida. Lucida currently manages £1.4 billion of annuity assets and serves about 31,000 pensioners. Experts have said that the Legal & General wull use its surplus capital to acquire the company but added that the synergies from the merger would help reduce the buying price to just £85 million.

Lucida was mainly established in 2006 to take advantage of market for taking pension liabilities from the employers but the firm started facing problems in the previous year as the credit crunch affected the company's decisions to transfer their pension obligations. The company was established by former Prudential chief executive Jonathan Bloomer and Chris Wales.

UK firms were increasingly looking to get rid of their pension obligations due to rising life expectancies, lower returns and pension taxes. Firms transferred more than £26billion of pension obligations before the credit crisis affected market and make it less lucrative business.