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Failed Standard Life/Scottish Widows talks sparked £109bn blow

Failed Standard Life/Scottish Widows talks sparked £109bn blow

A report suggests the decision to pull a £109 billion mandate from Standard Life Aberdeen was linked to failed merger talks with Scottish Widows and its insurance arm.

According to the Sunday Times, merger talks between Lloyds' Scottish Widows subsidiary and Standard Life collapsed just before Christmas due to differences over the structure of the proposed new operation.

The talks are understood to have commenced in June, just after the mega-merger between Standard Life and Aberdeen Asset Management was approved.

At the time, The Times  reported that a follow-up deal for Scottish Widows was the brainchild of Aberdeen chief executive Martin Gilbert and Standard Life chair Sir Gerry Grimstone.

It is said that Lloyds boss Antonio Horta-Osorio felt he had little choice but put the mandate on the market last week after the merger talks collapsed.

The mandate represented a substantial chunk of the £646.2 billion Standard Life Aberdeen reported managing at the end of last year.

The cash was run within the company following the Aberdeen group’s 2013 acquisition of Scottish Widows Investment Partnership, which was hailed at the time as creating a key strategic partner for the business.

‘We are disappointed by this decision in the context of the strong performance and good service we have delivered for LBG, Scottish Widows and their customers,’ Aberdeen Standard Life co-chief executives Keith Skeoch (pictured left) and Martin Gilbert (right) said in a statement, following the news.

In its statement, Scottish Widows said it was uncomfortable that the assets were being run by a ‘material competitor’ following the merger of Standard Life and Aberdeen. '[Therefore] we will begin an in-depth assessment of the market to identify a long-term strategic partner, or partners, to manage the current £109 billion of assets,’ the insurer said. 

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