Standard Life eyes merger with Scottish Widows

Xavier Trudeau
Juin 19, 2017

Standard Life is reported to be gearing up to enter talks about a potential merger with Scottish Widows, as shareholders vote today on its deal with Aberdeen Asset Management.

A major shift in the Scottish wealth management landscape is one the cards with Standard Life PLC (LON:SL.) now linked with a merger with Lloyds Banking Group PLC owned (LON:LLOY) pensions and life insurance group Scottish Widows.

Scottish Widows is reportedly planning to merge with rival provider Standard Life.

The combined business will be co-led by Aberdeen's CEO Martin Gilbert and Standard Life's chief executive Keith Skeoch. "I would argue this is a process that was put in place about 13 years ago".

In March, Lloyds voiced its support for the Standard Life-Aberdeen deal, saying it "welcomes the opportunity to explore way to build a successful relationship with the combined" group.

Skeoch was also asked about where the deal left Standard's annuity business and replied the company had not ruled out selling it. The banking group also took a 10 per cent stake in Aberdeen as part of the deal.

The Standard/Aberdeen merger prospectus says: "Since Aberdeen acquired Scottish Widows Investment Partnership Limited in 2014, Aberdeen and Lloyds have enjoyed a strong business partnership and Lloyds remains a key customer of Aberdeen".

The contract with Lloyds money was worth £137 million in revenue to Aberdeen in the last financial year to September 2016 and was originally scheduled to have a term of at least eight years.

However, Lloyds has agreed to delay making a decision in relation to the exercise of such termination rights or withdrawals until six months from the date of completion of the merger.

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