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Aberdeen confirms Scottish Widows talks
28 October 2013
Asset manager would become one of UK's largest with acquisition
Aberdeen Asset Management has confirmed it is in talks with Lloyds Banking Group over a possible acquisition of Scottish Widows Investment Partnership (Swip).
The acquisition would make the combined asset manager one of the largest fund mangers in the UK, with estimated assets under management in excess of £350bn ($565bn).
Press reports over the weekend indicated that the firm was looking to complete its acquisition at a price of around £400m to £500m and hoped to have the deal concluded by the end of the year.
Aberdeen said any potential deal would be funded through the issuance of new Aberdeen shares to Lloyds, plus additional deferred payments in cash, “conditional on the performance of the partnership over a period of years”.
Reports estimate that based on Aberdeen's current market value of £5bn, Lloyds could end up holding around 10% of the firm.
Australian bank Macquarie is also believed to be interested in an offer for SWIP.
In a statement, Aberdeen said: “The potential acquisition would add further scale and diversity to the company’s product range, thus complementing organic growth, consistent with the board’s strategy.
“The proposed transaction would also offer substantial cost efficiencies and synergies. The company would expect any transaction agreed to be materially earnings per share enhancing. It would also reinforce the company’s commitment to a progressive dividend policy and to return surplus capital to shareholders over time.”
The asset manager added that there was “no certainty” of a deal or any negotiations agreeing to the terms outlined. It added that it would make further statements on the progress of the deal “if and when appropriate”.