Scottish investment company Standard Life Aberdeen has struck a deal to sell its insurance business to UK insurance service provider Phoenix Group for a sum of £3.24 billion to simplify its business to focus on asset management.

Phoenix Group will pay £2.28 billion in cash and give Standard Life Aberdeen a stake of 19.99% in its business to acquire Standard Life Assurance as part of the deal. The sale also includes the UK Mature Retail and Spread/risk books and the Europe, UK Retail and Workplace businesses of Standard Life Aberdeen.

Based in Edinburgh, Standard Life Assurance was founded way back in 1825 and has a workforce of around 3,000 staff. Standard Life Assurance provides long-term savings and investment propositions in the UK, Ireland and Germany, serving nearly 4.5 million customers and clients.

The deal will also see Standard Life Aberdeen extend its current strategic partnership with Phoenix Group. Under this, Standard Life Aberdeen will continue as the long-term asset management partner of Phoenix Group for the business acquired by the latter.

The UK retail platforms and financial advice business of Standard Life Aberdeen will not be affected by the transaction.

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. In addition, I am particularly pleased to note Phoenix Group’s commitment to maintain operational headquarters in Edinburgh.”

  Insurance acquisition news, Insurance industry news, Phoenix Group, Standard Life Aberdeen, Standard Life Assurance, United Kingdom