Standard Life to start merger talks with Scottish Widows

Gladys Abbott
June 19, 2017

Shareholders are set to vote on an £11bn merger between Standard Life and Aberdeen Asset Management.

A major shift in the Scottish wealth management landscape is one the cards with Standard Life PLC (LON:SL.) now linked with a merger with Lloyds Banking Group PLC owned (LON:LLOY) pensions and life insurance group Scottish Widows.

Standard Life Aberdeen will be headed Martin Gilbert, left, and Keith Skeoch.

Completion of the Standard/Aberdeen merger is expected by mid-August.

In the prospectus on the merger earlier this year, the groups stated that the new combined firm would have discussions on its strategic partnership with Lloyds.

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Skeoch said: "We are - yes, you are right in terms of becoming more of a world-class investment company than a life assurer".

In March, Lloyds voiced its support for the Standard Life-Aberdeen deal, saying it "welcomes the opportunity to explore way to build a successful relationship with the combined" group.

According to The Times, Lloyds had given Aberdeen and Standard Life six months to close the deal and waived a change of control clause, which would have allowed it to reclaim the Scottish Widows business from Aberdeen.

Lloyds, which has recently returned fully to private ownership, sold the fund management business of Widows to AAM three years ago. This potential acquisition seems likely to be investment led - after Aberdeen's acquisition of the SWIP book there will be substantial investment management synergies and close ties remain through Lloyds Banking Group's 10% stake in Aberdeen.

Standard's investor meeting today is in the Assembly Rooms in Edinburgh, while Aberdeen's meeting will be at its London offices.

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