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Summary
- Standard Life Aberdeen is planning to sell its flagship brand Standard Life to Phoenix Group Holdings PLC.
- The deal is expected to be a restructured relationship agreement, including extension of its existing asset management partnership.
- The revamp of the legacy brand will be of significance given the company’s history in the UK financial services industry landscape.
Scotland-based global investment company Standard Life Aberdeen PLC (LON: SLA) is in talks to sell its 200-year-old flagship brand Standard Life to life insurance company Phoenix Group Holdings PLC (LON:PHNX) for an undisclosed amount, as per some media reports. The deal will be reportedly announced in the next few days. The investment firm could change its name after closing the deal with the insurer.
Standard Life Aberdeen was established in 2017 following the merger of Standard Life and Aberdeen Asset Management in a £13-billion deal.
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Deal terms
The ongoing negotiations will lead to a restructured relationship agreement between the two companies. The deal is said to be taking place under the codename Project Hulkum.
Want to know more? Do Read: Standard Life Aberdeen Plc sells 5.64% stake in HDFC AMC
The transaction will also include the extension of both organisations’ partnership in asset management, the terms of which were first formalised in 2018. Moreover, the deal would lead the company’s name to be changed once it is formalised.
The asset management company had sold its insurance business vertical to the insurance services giant Phoenix Group for £3 billion in 2018. According to the deal, Standard Life Aberdeen had received a 19.9 per cent shareholding of the insurance firm. Additionally, the deal allowed the Scottish firm’s investment vertical, Aberdeen Standard Investments, to manage the Phoenix Group’s assets under management for an extension of £48 billion.
Revamp of legacy brand
The Scottish asset management CEO Stephen Bird’s decision to dispose of its centuries old legacy brand would have significant implications for the firm given its position as an important part of the UK’s financial services history. While a change in name is not expected to be undertaken immediately, it will be confirmed later this year following deal completion.
Want to know more? Do Read: Phoenix Group Holdings Plc declares 2019 annual results
A media report stated that senior executives within the organisation favoured retaining the Aberdeen brand due to its familiarity in the Asian markets. However, deal size details and potential rebranding of existing names currently remain undisclosed.
The move comes after the merger of Standard Life and Aberdeen Asset Management was completed in a £13-billion deal in 2017. This had led to the establishment of the merged entity, Standard Life Aberdeen, which had emerged as the UK’s largest standalone asset management company.
Stock market reaction
Following the news, Standard Life Aberdeen’s shares fell by 0.33 per cent to close at GBX 316.75 as of 11 February, 4:43 PM GMT. In comparison, Phoenix Group’s stock price closed at GBX 711.00, up by 0.40 per cent for the same period.
