Standard Life Aberdeen is to return up to £1.75 billion to shareholders following the sale of its European insurance business to Phoenix Group.
The group said earlier this year that it would offload Standard Life Assurance to its rival, with the asset management giant receiving £2.3 billion in cash and a 19.9% slice of the Phoenix business.
Standard Life’s board now expects that there will be “surplus capital” within the group as a result of the deal and lower capital requirements.
The group said £1 billion is to be returned by way of a B share scheme and the remaining amount of up to £750 million via a share buyback programme.
“The last year has been a period of significant change for Standard Life Aberdeen, with the proposed sale of the UK and European insurance businesses completing our transformation to a capital light investment company,” said chairman Gerry Grimstone.
“The cash generated from the sale will enable us to continue to invest in the development of our business and also to return surplus capital to shareholders,” he added.
As part of the deal, Phoenix will take on the UK mature retail and spread/risk books and the Europe, UK retail and workplace operation, while Standard Life Aberdeen will hold on to the UK retail platforms and financial advice business.