Sunday, 17 February, 2019

Standard Life Aberdeen to sell insurance arm for £3bn

Standard Life Aberdeen sells insurance arm to Phoenix Standard Life Aberdeen sells insurance arm to Phoenix
Nellie Chapman | 23 February, 2018, 13:53

Britain's Phoenix Group Holdings is understood to be in talks to buy Standard Life Aberdeen's insurance business for about £3 billion.

Standard Life Aberdeen said the sale of the capital-intensive business to Phoenix leaves it retaining the core of its fast-growing Retail channel.

Standard Life Aberdeen on Friday said it was selling its insurance arm to Phoenix for £3.2bn.

The acquisition encompasses all of Standard Life Aberdeen's United Kingdom and European life insurance business, with the firm retaining its United Kingdom retail platforms and advice business. Barclays lifted their target price on Standard Life Aberdeen from GBX 510 ($7.05) to GBX 520 ($7.18) and gave the stock an "overweight" rating in a research report on Wednesday, November 1st. "In partnering with Phoenix Group, whose expertise is in administering and servicing long-term savings, Standard Life Aberdeen is able to realise attractive value for the disposed businesses, while continuing to benefit from access to related assets and flows".

The firm was also hit by a move by Lloyds Banking Group earlier this month which announced it is to withdraw £109bn of assets now managed by Standard Life Aberdeen for Scottish Widows, almost 17% of Standard Life Aberdeen's AUM.

Aberdeen Standard Investments now manages around £48bn on behalf of Phoenix in a partnership deal that has also been extended today.

Sky News has learnt that Sir Gerry Grimstone, who was the architect of last year's tie-up between Standard Life and Aberdeen Asset Management, will leave next year once a successor is in place.

Phoenix boss Clive Bannister said: "This is a compelling transaction for Phoenix, consistent with the Group's stated strategy and acquisition criteria".

"We haven't done this transaction to solve the competition issues [with Lloyds]", co-head Martin Gilbert said on Friday morning. Sanford C. Bernstein cut shares of Standard Life Aberdeen to a market perform rating and set a GBX 430 ($5.94) price objective on the a report on Tuesday, October 17th. reaffirmed a buy rating on shares of Standard Life Aberdeen in a report on Thursday, November 9th.

The firm also announced Sir Gerry would be stepping down as chairman from the board by the end of 2019 after 11 years.

Directors Julie Chakraverty, Lynne Peacock and Akira Suzuki will all also retire from the board of the company at the conclusion of its next AGM.