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ScotLife sold to GE Capital in £1bn deal

GE Capital, the financial arm of the world&#39s biggest company, has snapped up pension specialist Scottish Life in a deal valued at £1bn due to be announced later this week.

The move leaves Standard Life as the only major independent insurance companyin Scotland.

Industry sources say the deal is the right for the mut-ual, as its pension products are a good fit with GE&#39s existing financial services business.

The deal has been likened to the takeover of Scottish Equitable by Aegon in 1996, in that ScotLife&#39s management will maintain day-to-day control of the business. A merger with a UK life office would probably have led to the loss of such control.

GE is the world&#39s biggest company by market capitalisation with assets of more than $300bn (£209.7bn) and 28 specialised businesses around the world. ScotLife will benefit from the substantial financial support GE Capital offers.

ScotLife has been undergoing a review of its mutual status for some months and has been in negotiation with a number of companies.

A takeover bid had been expected as it was not expected that Scottish Life, which has 1,200 employees, would have the financial strength to compete in the stakeholder environment.

Windfalls of between £3,000 to £4,000 are expected for its estimated 300,000 qualifying policyholders. Applications received after September 11 will not qualify for membership, stopping carpetbaggers from cashing in on windfalls.

Millbrae Financial Services managing director Carl Melvin says: “Scottish Life will be a good fit within GE Capital. ScotLife is a strong pension office committed to IFAs. It will be a feather in GE&#39s cap. ScotLife was too small to remain as it was. GE has the resources to develop the ScotLife brand and could make significant inroads to the IFA market.”

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