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Failed Scot Wids Standard Life insurance merger talks behind £109bn blow

Antonio-Horta-Osorio-700x450.jpgA 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.

Reports that Lloyds was eyeing a deal with Standard Life emerged last year.

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.

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  1. The Sunday Telegraph had a different slant on the problems with the merger They stated that shareholders and investors have concerns about the funds withdrawn over the last year to 17 months
    They feel that a increase in the dividend payment may be required to keep them on side after all they are facing a 15% loss since the official merger day in August 2070
    All will be revealed on 23 February when Full years results are been revealed Should make for interesting reading

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