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Investing.com -- Aegon Ltd (AS:AEGN) announced today it will sell Aegon UK to Standard Life for a total consideration of £2.0 billion, marking the completion of the strategic review of its UK operations.
The proceeds consist of a 15.3% shareholding in Standard Life, equivalent to 181.1 million shares, and £0.75 billion in cash. Any remittances taken out of Aegon UK between signing and closing will be deducted from the cash amount.
The total consideration represents 14.2 times Aegon UK’s 2025 operating result after tax and 1.9 times its 2025 IFRS shareholder’s equity.
Aegon plans to use the cash received from the transaction, minus expected remittances between signing and closing, for a combination of deleveraging and share buybacks once the deal is completed.
The transaction is expected to close around the end of 2026, subject to customary conditions, including regulatory approvals. Aegon will enter into a lock-up period for the shares received, lasting until the earlier of 18 months following completion or the completion of Aegon’s redomiciliation to the United States.
"Overall, we think the transaction will accelerate Standard Life’s transition to capital light earnings, while creating further scale in the structural growth opportunity of DC pensions and providing an additional foothold in the UK advice market," according to RBC analysts.
Aegon’s asset management activities in the UK will remain part of the company’s global asset manager and will serve as an asset management partner for the combined business.
Following the transaction, Aegon’s group operating result run-rate is expected to grow by around 5% per annum between 2025 and 2027, from a proforma 2025 run-rate of €1.3 billion to €1.5 billion.
Operating capital generation after holding funding and operating expenses is expected to grow between 0% and 5% per annum over the same timeframe, from a proforma 2025 run-rate of €0.7 billion to €0.75 billion.
On a proforma 2025 basis, prior to any deleveraging or share buyback initiatives, the transaction is expected to result in a 5 percentage point reduction in the group solvency ratio. The deal is expected to have a positive impact of €1.1 billion on group shareholders’ equity and a negative impact of €0.1 billion on group valuation equity.