Lloyds Banking Group has announced this morning that it has agreed to sell Scottish Widows Investment Partnership (SWIP), its asset management business, to Aberdeen Asset Management, for an initial consideration of £560m, paid for by the issue of nearly 132m new Aberdeen shares. Aberdeen shares are soaring on the news this morning, up over 14 per cent. (Release)
The deal, part of a "long-term strategic relationship", will see Lloyds transfer ownership in return for a 9.9 per cent stake in UK-based Aberdeen. Aberdeen, which employs around 2,500 people, with funds under management of about $350bn, will now overtake Schroders as the biggest independent fund manager in Europe. Martin Gilbert, chief executive of Aberdeen, said in a statement today: "the acquisition of SWIP adds scale to our business across a range of asset classes; and it also introduces a strategic relationship with Lloyds Banking Group." (Release)
Aberdeen said last month that it was in talks with Lloyds about a possible deal. The company will gain about £136bn in assets under management from Scottish Widows, with annualised revenues of approximately £234m.
Lloyds, which is over 30 per cent state-owned, had delayed dealing with SWIP whilst it prepared to list its TSB Bank business to comply with European Union rules on state aid.
The lender says it intends to "be a supportive shareholder", agreeing lock-up arrangements which mean the group will maintain its initial shareholding for at least one year, two-thirds for at least two years and one-third for at least three. A further payment of £100m will be paid in cash over a five year period, dependent on business growth generated from the partnership.