Standard Life has agreed to acquire Aegon UK, the British insurance and pensions arm of Dutch group Aegon, for £2 billion in a transaction that will create the UK’s largest retirement savings and income business.
The combined group will serve 16 million customers with approximately £480 billion in assets under administration, moving Standard Life to the number two position in both UK workplace pensions and UK retail.
The deal significantly scales up the company’s pension and savings capabilities, adding advice, distribution and digital capacity across both channels while securing an established adviser platform.
Andy Briggs, Group 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.”
The acquisition will be funded through a mix of debt, cash and newly issued Standard Life shares representing around 15.3% of the enlarged group’s share capital. Aegon will become a strategic shareholder and asset management partner in the combined business.
Standard Life pointed to £0.8 billion of total net synergy value, comprising £110 million of run-rate pre-tax cost synergies and roughly £340 million in one-off capital synergies.
The deal is expected to add £190 million in adjusted operating profit and £160 million in operating cash generation, with mid-single-digit accretion to adjusted operating earnings per share by 2029.