Standard Life buys rival in £2b deal to create savings giant

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Normal Life has agreed to purchase rival Aegon’s UK enterprise for £2 billion in a transfer set to create a pension and financial savings large.

The deal will see Normal Life, not too long ago rebranded from Phoenix Group, oversee 16 million prospects and £480 million in property beneath administration.

Below the phrases, Normal Life can pay £750 million in money, part-funded via debt, and challenge 181.1 million new shares to Dutch monetary agency Aegon.

The transaction will grant Aegon a 15.3 per cent stake within the FTSE 100-listed Normal Life, together with the suitable to nominate one non-executive director to the mixed group’s board.

Andy Briggs, Normal Life chief government, mentioned the settlement to amass Aegon UK “considerably accelerates our imaginative and prescient to be the UK’s main retirement financial savings and revenue enterprise”.

“Collectively, we is not going to solely be stronger, we can be higher.”

Normal Life is known to have seen off rival bidders, similar to Lloyds Banking Group and Barclays, to safe the deal.

Amsterdam-listed Aegon, which relies in Schiphol within the Netherlands, put its UK arm up on the market on the finish of final 12 months as a part of a group-wide overhaul that may see it transfer its headquarters to the US and be renamed as Transamerica.

Normal Life mentioned the deal – set to finish across the finish of 2026 – will catapult it to second place in Britain’s retail pensions and financial savings market and in the identical place for office pensions, including Aegon UK’s 3.8 million prospects and £160 billion in property beneath administration.

It’s aiming to drive financial savings of £110 million a 12 months after the deal, with over half delivered by the top of 2029 and the remainder by the top of 2031, pushed by cuts made throughout mixed group and head workplace operations and because the pair combine their platforms.

Lard Friese, Aegon chief government, mentioned: “The companies are complementary and the mixture presents a superb consequence for Aegon UK’s prospects and colleagues.

“Aegon’s shareholding will present a chance to take part sooner or later success of the enlarged group.”

Phoenix Group purchased Normal Life’s insurance coverage enterprise from the then Normal Life Aberdeen in 2018 and introduced plans to rebrand as Normal Life final 12 months.

It additionally has manufacturers together with SunLife, Phoenix Life, ReAssure and Phoenix Wealth.

Panmure Liberum analyst Abid Hussain mentioned: “Total, this appears to be like like a great deal, though there can be questions on why the expense and capital synergies take 5 years to totally realise; we’d ordinarily anticipate this to be achieved in three years.”