Standard Life has agreed to buy rival Aegon’s UK business for £2 billion in a move set to create a pension and savings giant.
The deal will see Standard Life, recently rebranded from Phoenix Group, oversee 16 million customers and £480 million in assets under administration.
Under the terms, Standard Life will pay £750 million in cash, part-funded through debt, and issue 181.1 million new shares to Dutch financial firm Aegon.
The transaction will grant Aegon a 15.3 per cent stake in the FTSE 100-listed Standard Life, along with the right to appoint one non-executive director to the combined group’s board.
Andy Briggs, Standard Life chief executive, said the agreement to acquire Aegon UK “significantly accelerates our vision to be the UK’s leading retirement savings and income business”.
“Together, we will not only be stronger, we will be better.”
Standard Life is understood to have seen off rival bidders, such as Lloyds Banking Group and Barclays, to secure the deal.
Amsterdam-listed Aegon, which is based in Schiphol in the Netherlands, put its UK arm up for sale at the end of last year as part of a group-wide overhaul that will see it move its headquarters to the US and be renamed as Transamerica.
Standard Life said the deal – set to complete around the end of 2026 – will catapult it to second place in Britain’s retail pensions and savings market and in the same position for workplace pensions, adding Aegon UK’s 3.8 million customers and £160 billion in assets under management.
It is aiming to drive savings of £110 million a year after the deal, with over half delivered by the end of 2029 and the rest by the end of 2031, driven by cuts made across combined group and head office operations and as the pair integrate their platforms.
Lard Friese, Aegon chief executive, said: “The businesses are complementary and the combination offers an excellent outcome for Aegon UK’s customers and colleagues.
“Aegon’s shareholding will provide an opportunity to participate in the future success of the enlarged group.”
Phoenix Group bought Standard Life’s insurance business from the then Standard Life Aberdeen in 2018 and announced plans to rebrand as Standard Life last year.
It also has brands including SunLife, Phoenix Life, ReAssure and Phoenix Wealth.
Panmure Liberum analyst Abid Hussain said: “Overall, this looks like a good deal, although there will be questions on why the expense and capital synergies take five years to fully realise; we would ordinarily expect this to be achieved in three years.”
