Standard Life has acquired Aegon’s UK arm and is set to become the country’s largest retirement savings and income business, with around 16 million customers.
The £2bn deal will see Netherlands-based Aegon become a “strategic shareholder and asset management partner” for Standard Life, according to an announcement released this morning (15 April).
The combined group will be responsible for approximately £480bn of assets under administration.
Andy Briggs, group chief executive officer at Standard Life, said: “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.”
Under the terms of the agreement, the transaction will be funded through a mix of cash, debt, and shares in Standard Life. The acquisition is subject to regulatory approval and is expected to be completed by the end of this year.
The announcement also highlighted that Standard Life would continue to explore opportunities in the bulk annuity market. The company has committed to allocating £200m a year to this area.
Master trust plans as Pension Schemes Bill looms large
As well as asset management and individual pension businesses, the deal also brings together two major master trusts. The Standard Life Master Trust has £14.2bn in assets under management and 370,000 members, according to data from Go Pensions, while the Aegon Master Trust has 204,000 members and £6.5bn in assets.
The Pension Schemes Bill, which is expected to receive Royal Assent soon, contains provisions to encourage consolidation among defined contribution master trusts into vehicles with at least £25bn in assets under management.
A Standard Life spokesperson told Pensions Expert that this was “not a driving factor for the acquisition” as Standard Life’s master trust already has over £35bn in its main default fund. Instead, they said the acquisition “was driven more by the attractive nature of the market, which is structurally growing, and the ability to scale our offering more broadly and acquire a number of attractive propositions and capabilities”.
“Today marks the start of a journey, and it will take some time to consider how we bring the best of both propositions to market,” the spokesperson added. “For the foreseeable future, it is very much business as usual for both organisations, with existing relationships, services and support continuing unchanged.”
