Aberdeen Asset Management nears acquisition of SWIP from Lloyds Banking Group- report

November 17
7:17 PM 2013

Citing sources, The Sunday Times reported that Aberdeen Asset Management is nearing an agreement to purchase Scottish Widows Investment Partnership or SWIP from Lloyds Banking Group. The two people with knowledge about the talks said the price tag for shares of the SWIP division is estimated to be GBP 500 million or USD 806 million. They spoke on the condition of anonymity since the talks were private. According to the sources, a public announcement about the deal could be made as early as tomorrow.

If the transaction proceeds, adding the SWIP division to its portfolio will make Aberdeen Asset Management the biggest publicly traded money manager in Europe. Aberdeen's assets could increase to an estimated GBP 350 billion because of the acquisition. This would enable Aberdeen to overtake Schroders as the largest publicly traded fund firm in Europe. According to a Bloomberg report, the purchase would also indicate that Aberdeen had taken a different approach to its previous strategy of growing the firm without acquisitions and giving back cash to its investors. Aberdeen Asset Management Chief Executive Officer Martin Gilbert had earlier said that it was highly unlikely that his company would purchase Scottish Widows Investment Partnership.

Lloyds Banking Group, led by its Chief Executive Officer Antonio Horta-Osorio, has been looking to shore up its balance sheets through exits. Aside from putting assets up for sale, Lloyds has also been reducing expenses and paring down its workforce after it was bailed out by the government five years ago. SWIP was bought by the Lloyds Banking Group in 2000 in a GBP 7.3 billion deal. SWIP has life insurance as well as a fund management units. At the end of the first half of the year, SWIP managed assets amounting to GBP 145.8 billion. Deutsche Bank was hired by Lloyds as an adviser for the SWIP sale.

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