Standard Life has agreed a £2bn deal to acquire Aegon UK plc, which will have major repercussions for jobs in Edinburgh.
Both companies have major operations in the Capital, with Aegon UK based out at Edinburgh Park.
The transaction will be funded through a combination of debt, cash and the issue of new ordinary shares in Standard Life (representing approximately 15.3 per cent of the Group’s enlarged share capital) to Aegon on completion, with Standard Life welcoming Aegon as a new strategic shareholder and asset management partner.
Andy Briggs, croup CEO of Standard Life, said: “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. Furthermore, the transaction accelerates our shift to capital-light whilst strengthening our cash, capital and earnings position to create increased value for shareholders.
“With financial wellbeing at the heart of everything it does, Aegon UK’s values and culture are aligned with our own. Together, we will not only be stronger, we will be better – helping our customers achieve better outcomes and greater financial security in later life. I look forward to welcoming everyone at Aegon UK to Standard Life in due course and working together to capture the huge potential in front of us.”
Lard Friese, Aegon CEO, added: “Standard Life is the right owner for Aegon UK: we share the same values and a strong commitment to customers, and together the businesses will create the UK’s largest retirement savings and income provider. 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.”
Standard Life will acquire 100 per cent of Aegon UK for a total consideration of £2bn. The consideration implies a valuation of 0.83x Price to UT1 for Aegon UK of £2.4bn as at FY25.
The combination of these two complementary businesses, both with strong presences in Edinburgh, accelerates Standard Life’s vision to be the UK’s leading retirement savings and income business and the shift towards capital-light, Pensions and Savings earnings.
The deal is expected to strengthen customer and adviser engagement through digital tooling and AWS enabled data capabilities, supporting more informed decision making and optimised customer and adviser experiences.
The value of the gross assets of Aegon UK was £110,757 million. While adjusted operating profit for Aegon UK is £190m.
Freshfields is acting as legal adviser to Standard Life.