Standard Life Aberdeen, the newly merged fund management business, is to sell its insurance arm to Phoenix Group in a £3.2bn deal.
The company said the move to divest its insurance business was part of its strategy of “building a world-class investment company”.
Phoenix will pay £2.24bn in cash, while Standard Life Aberdeen will take a 19.99% shareholding in Phoenix and have two seats on the board.
Commenting on the deal, Sir Gerry Grimstone, chairman of Standard Life Aberdeen, said: “This transaction completes our transformation to a capital-light investment business, a process started in 2010 with the sale of Standard Life Bank, continuing with the sale of our Canadian business and the merger last year between Standard Life and Aberdeen Asset Management.
“This transaction represents excellent value for our shareholders, including a comprehensive and mutually beneficial strategic relationship entered into with Phoenix Group, a longstanding partner of the firm.”
Annual report shows inflows down
Standard Life Aberdeen has also announced its 2017 end-of-year results.
Total gross inflows for the 2017 financial year were £80.1bn, slightly down on the figure of £80.4bn in 2016, mainly accounted for by a £2.8bn fall in inflows to its multi-asset investments; a £0.7bn drop in real estate investment; and a £1.0bn fall in fixed income.
However, inflows from equity investments were up 8% at £16.2bn, from £15.0bn in 2016.
Total assets under management were £654.9bn at 31 December 2017, up from £647.6bn on 1 January 2017.