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Abbey buys Scottish Provident for £2bn

Abbey National has reportedly won the Scottish Provident sweepstakes with a deal for the purchase of the mutual insurer worth £2bn.

The sale will result in windfalls for Scot Prov policyholders of an average of £4,500 to £6,500 each.

Abbey was facing competition from a number of rivals including Royal London, Liverpool Victoria, Old Mutual and Swiss Life. All of them had expressed interest following Scot Prov&#39s announcement earlier this year it was interested in demutualisation.

Any deal would have to be approved by the life office&#39s 450,000 policyholders. A vote is most likely to be held next spring, with windfalls being paid to those eligible by the autumn.

Abbey will likely sell off Scot Prov&#39s 38 per cent interest in fund manager Aberdeen Asset Management worth between £300m and £400m. Scot Prov has a total of £10.5bn in assets.

If successful the move will redeem Abbey chief executive Ian Harley who failed in his bid to buy Scottish Amicable in 1997.

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