Standard Life buys Aegon UK for £2bn

Standard Life has bought rival life company Aegon UK £2bn, forming the UK's largest retirement savings and income business with 16 million customers and assets under management of £480bn.

The deal is being funded through a combination of cash, debt and shares in Standard Life, with Aegon becoming a strategic shareholder and asset management partner.

The acquisition is expected to increase group operating cash generation and IFRS adjusted operating profit by around £160 million a year, and to deliver £400m of additional excess cash over the five years following completion of the deal.

The deal will also make Standard Life the UK's second largest workplace pensions platform by assets and customers.

Commenting on the acquisition, 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."

Lard Friese, Aegon CEO, added: “The transaction represents an important step in our ambition to become a leading US life insurance and retirement group. Aegon’s asset management business in the UK will remain an important asset management partner to the new combined business."