Standard Life strikes PS2.0 billion deal to buy Aegon UK arm

Standard Life PLC on Wednesday said it has struck a £2.0 billion deal to acquire Aegon Europe Holding BV’s UK insurance and pensions operations, in a cash and shares deal.

The Edinburgh-based insurance, savings and retirement products firm, formerly called Phoenix Group Holdings PLC, said Aegon will become a ‘new strategic shareholder and asset management partner’ with a stake of just over 15%.

Standard Life will pay £750 million in cash. That portion will be funded by a £650 million debt issuance and existing cash resources. It will issue 181.1 million shares to Aegon.

The Aegon holding is subject to a lock up ending on the earlier of 18 months from completion or the completion of the redomiciliation of Aegon’s holding company to the US, which is expected at the start of 2028.

‘The relationship agreement with Aegon entitles Aegon to appoint a non-executive director to the board and underpins the strategic asset management partnership between Aegon and Standard Life,’ Standard Life said.

The company added that its existing strategic shareholders, MS&AD Insurance Group Holdings Inc and Aberdeen Group PLC, are supportive of the strategy and remain committed to their shareholdings.

‘The potential for significant value creation of the enlarged group is attractive for them, and we look forward to continuing the development of our already close association with both,’ Standard Life added.

The company said the combination of the businesses accelerates its vision to be ‘the UK’s leading retirement savings and income business’ and the shift towards ‘capital-light, pensions and savings earnings’.

Standard Life said the enlarged group will have 16 million customers and assets under administration of around £480 billion.

The deal delivers a total net synergy value of £800 million, including £100 million of run-rate pretax cost synergies and £340 million of one-off capital synergies.

Standard Life said the acquisition will lead to £160 million operating cash generation and £190 million adjusted operating profit, with a mid-single digit accretive to adjusted operating earnings per share by 2029.

The transaction is subject to regulatory conditions and is expected to complete around the end of 2026.

‘Our agreement to acquire Aegon UK significantly accelerates our vision to be the UK’s leading retirement savings and income business. We will be in an even stronger position to meet the evolving needs of our 16 million customers with enhanced digital, advice and distribution capabilities across Workplace and Retail, strengthening our standing in one of the world’s most attractive markets,’ said Standard Life Chief Executive Officer Andy Briggs.

‘Furthermore, the transaction accelerates our shift to capital-light whilst strengthening our cash, capital and earnings position to create increased value for shareholders.’

Shares in Standard Life were up 0.9% at 720.53 pence on Wednesday morning in London.

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