Standard Life has agreed to acquire Aegon UK in a £2bn transaction, creating what it said will be the UK’s largest retirement savings and income business.

The deal will see the combined group serve around 16 million customers with approximately £480bn in assets under administration (AUA), significantly expanding Standard Life’s presence across both workplace and retail pensions markets.

The acquisition will be funded through a mix of cash, debt and new shares, with Aegon set to take a 15.3 per cent stake in the enlarged group and act as a strategic shareholder and asset management partner.

Standard Life said the transaction would strengthen its position in the UK pensions market, establishing it as the second-largest workplace pensions platform and the second-largest retail pensions and savings platform by assets and customers.

The addition of Aegon UK is expected to bring around £160bn in AUA and 3.8 million customers to the group, while enhancing its digital, advice and distribution capabilities.

Financially, the deal is projected to increase operating cash generation by £160m per year and IFRS-adjusted operating profit by approximately £190m annually, while delivering £400m of additional excess cash over five years.

Standard Life also expects the transaction to generate £0.8bn in net synergies, driven by cost savings and capital efficiencies, as it continues its shift towards a more capital-light business model.

Completion of the deal remains subject to regulatory approvals and is anticipated by the end of 2026.

Standard Life CEO, Andy Briggs, said the acquisition would accelerate the firm’s strategic ambitions.

“We will be in an even stronger position to meet the evolving needs of our 16 million customers with enhanced digital, advice and distribution capabilities across workplace and retail, strengthening our standing in one of the world’s most attractive markets.

“Furthermore, the transaction accelerates our shift to capital-light whilst strengthening our cash, capital and earnings position to create increased value for shareholders.”

Briggs added that the two firms shared a common focus on financial well-being.

“Together, we will not only be stronger, we will be better – helping our customers achieve better outcomes and greater financial security in later life,” he continued.

Aegon CEO, Lard Friese, also welcomed the deal, stating that Standard Life was “the right owner” for the UK business, highlighting the complementary nature of the two firms.

This article was first published on our sister website, Pensions Age.

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