Standard Life Aberdeen CEOs hit merger pay jackpot

Ann Santiago
February 24, 2018

The transformation of Standard Life Aberdeen into a pure investment management business accelerated yesterday when it confirmed the £3.2 billion sale of its insurance division to a smaller rival.

Standard Life Assurance Limited, which was founded in 1825, is being purchased by Phoenix Group.

The updates mark a boost for the company, which recently suffered a heavy blow as Lloyds Banking Group (LON:LLOY) moved to pull out £109 billion of assets under management from the group. Royal Bank of Canada restated an outperform rating and issued a GBX 520 ($7.18) price target on shares of Standard Life Aberdeen in a report on Wednesday, January 17th.

Total assets under management and administration were £654bn, up from £647bn a year ago.

However, inflows from equity investments were up 8% at £16.2bn, from £15.0bn in 2016. Standard Life Aberdeen has a fifty-two week low of GBX 339.67 ($4.69) and a fifty-two week high of GBX 448.60 ($6.20).

The sale is expected to be completed in the third quarter of 2018, subject to regulatory approval.

"Today's announcement represents a logical next step in Standard Life Aberdeen's journey to build a world-class investment company", the FTSE 100 group's chief executives Martin Gilbert and Keith Skeoch commented in the statement.

"We have a diverse range of modern investment capabilities with global distribution and our leading United Kingdom retail platforms are growth engines generating significant net inflows for our asset management business".

Grimstone added that the deal concludes "a process started in 2010 with the sale of Standard Life Bank, continuing with the sale of our Canadian business and the merger a year ago between Standard Life and Aberdeen Asset Management". Numis Securities lifted their target price on shares of Standard Life Aberdeen from GBX 445 ($6.15) to GBX 481 ($6.65) and gave the company a "hold" rating in a report on Friday, October 27th.

SLA also separately announced on Friday several board changes, including the departure by the end of 2019 of chairman Gerry Grimstone, 68, who became Standard Life chairman in 2007.

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