As part of the deal, Aberdeen will acquire Scottish Widows Investment Partnership Group (Swip) and Swip’s related private equity and infrastructure fund management businesses.
The transaction is subject to certain regulatory approvals. The acquired business includes the investment solutions division of Swip, which is a separate investment group responsible for the design, development and management of investment solutions for Lloyds’ wealth clients.
The strategic relationship will operate across Lloyds’ wealth, insurance, commercial banking and retail businesses and is expected to result in a stronger asset management offering for customers.
The consideration for the acquisition of approximately £550m will be satisfied by the issue of 131.8 million new Aberdeen shares to Lloyds, equivalent to an approximately 9.9% stake following completion of the acquisition.
In addition, there will be a performance-related five year earn-out payment of up to £100m dependent on growth delivered by the strategic relationship with Lloyds in the investment solutions business. The acquired business will add approximately £136bn of AuM with annualised revenues of approximately £234m.
Martin Gilbert, chief executive of Aberdeen Asset Management said, “This transaction is significant for the long term prospects of Aberdeen in a number of ways.
It strengthens our investment capabilities and adds new distribution channels; 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.
We are confident that this transaction will deliver considerable additional value to our expanded client base and this will therefore benefit our shareholders.”