Belfast Telegraph

Friday 26 December 2014

Aberdeen secures £660m Lloyds deal

Lloyds Banking Group has sold Scottish Widows Investment Partnership to Aberdeen Asset Management
Lloyds Banking Group has sold Scottish Widows Investment Partnership to Aberdeen Asset Management

Aberdeen Asset Management is to become Europe's biggest independent fund manager after striking a deal worth up to £660 million with Lloyds Banking Group .

The takeover of Scottish Widows Investment Partnership will result in Lloyds holding a 9.9% stake in Aberdeen while the two companies will also form a long-term strategic partnership.

Aberdeen manages around £200 billion of funds and is set to add another £136 billion once the acquisition of Edinburgh-based SWIP completes early next year.

Aberdeen fought off competition from other possible bidders, including Australian investment bank Macquarie, to secure a deal that will see it overtake Schroders as Europe's biggest investment house. Its shares jumped by more than 10% today.

Lloyds has been holding a six-month auction for SWIP - part of the bank's Scottish Widows insurance arm - as it sells off assets to shore up its balance sheet and focus on its UK retail and commercial banking businesses.

The group, which is 32% owned by the taxpayer, will continue to own Scottish Widows, the group's life, pensions and investment business.

Today's agreement will see a broad range of Aberdeen's investment funds sold through 1,300 Lloyds branches.

It is the latest step in the transformation of Lloyds under chief executive Antonio Horta-Osorio.

He will qualify for a long-term bonus worth £2.3 million this week if shares in the banking group hold steady.

The boss of the state-backed banking group will receive just over three million shares should the stock close above 73.6p on Wednesday.

Mr Horta-Osorio will not be able to sell them until 2018 under the incentive scheme. They were 75.6p today, at which price the bonus would have a paper value of around £2.3 million.

The acquisition is worth an initial £550 million met by the issue of 131.8 million new Aberdeen shares to Lloyds, equivalent to a 9.9% stake in the group.

There will also be a performance-related five year payment of up to £100 million dependent on growth delivered by the strategic relationship.

COMMENT RULES: Comments that are judged to be defamatory, abusive or in bad taste are not acceptable and contributors who consistently fall below certain criteria will be permanently blacklisted. The moderator will not enter into debate with individual contributors and the moderator’s decision is final. It is Belfast Telegraph policy to close comments on court cases, tribunals and active legal investigations. We may also close comments on articles which are being targeted for abuse. Problems with commenting? customercare@belfasttelegraph.co.uk

Latest News

Latest Sport

Latest Showbiz