A breakdown in talks to merge Lloyds’ Scottish Widows arm with Standard Life’s pension and life insurance business led the high street bank to pull £109bn from the asset manager, according to reports.
Last week, Standard Life Aberdeen shares fell 6 per cent on news Lloyds decided to end investment management arrangements with the asset manager on £109bn of assets due to competition issues.
According to a Sky News report, the discussions, which started in June and ended in mid-December, failed because of disagreement around the structure of the new venture.
The report says SLA’s co-chief executives Martin Gilbert and Keith Skeoch supported the proposed insurance business framework.
If agreed, the venture would have been roughly 60 per cent-owned by Lloyds, with the remainder owned by SLA and the bank would have supplied both its chairman and chief executive.
The entity would have managed around £330bn assets.
However, talks collapsed after SLA suggested a joint venture for the merger to be run as a standalone company with a shared board, while Lloyds wanted more control with the new business to become a subsidiary of the bank.
After the talks, Lloyds chief executive Antonio Horta-Osorio reportedly made the decision to pull the investment contract from SLA, despite this representing around 17 per cent of Standard Life Aberdeen’s AUM, but only 5 per cent of revenues.
A source says that Lloyds’ decision to pull the investment contract with SLA was attracting attention from City watchdogs.