Standard Life Aberdeen sells insurance business for over £3bn
One of the UK’s oldest insurance companies is to be sold for £3.24bn.
Edinburgh-based Standard Life Assurance Limited, which was founded in 1825 and has about 3,000 staff, is being purchased by Phoenix Group.
Announcing the deal, parent company Standard Life Aberdeen (SLA) said it would receive £2.3bn in cash and a 19.9% stake in Phoenix.
SLA said the move completed its move out of insurance to concentrate on asset management.
As part of the deal, SLA said it would expand the companies’ existing strategic partnership and look to be “the asset manager of choice” for Phoenix.
Commitment to Scotland
SLA co-Chief Executives Martin Gilbert and Keith Skeoch said: “Today’s announcement represents a logical next step in Standard Life Aberdeen’s journey to build a world-class investment company positioning us strongly for the future.”
Phoenix, which is a consolidator of life assurance platforms and operates mostly out of Birmingham, has said about 57% of the new, enlarged workforce will be in Scotland.
The company has committed to retaining its operational headquarters in Edinburgh.
BBC Scotland’s business and economy editor, Douglas Fraser, said: “This a big deal for Edinburgh finance. It involves around 3,000 staff waking up this morning to find, when this is all sorted through, they will no longer work for Standard Life Aberdeen, they will work for Phoenix.
“There’s bound to be some concern about what they like to call synergy, or duplication, or simply cost-cutting, reducing the headcount.
“A lot of the cost-cutting, they reckon, can come through more efficiency in capital. This is part of the reason why Standard Life Aberdeen is floating this off, they find this is a part of the business that it too ‘capital heavy’.”