Aegon has said its £140million acquisition of the UK’s biggest investment platform business Cofunds will drive the future growth of its UK business employing 2000 in Edinburgh.

In a deal which had been rumoured and not denied by Aegon for six months, Legal & General has offloaded the Cofunds platform which has 750,000 customers and a massive £78billion of assets under administration.

Industry sources said Aegon had outbid other platform players and private equity funds, after an earlier proposed deal with AJ Bell fell through.

Adrian Grace, Aegon UK’s chief executive said: “From a standing start a few short years ago, we have transformed our business beyond all recognition. Aegon is now well on the journey from a traditional life and pensions provider to the largest workplace and retail platform business.”

A pioneer platform, Cofunds needed heavy investment in technology to keep it competitive, and Aegon is to move all assets onto its two-year-old ARC platform by the end of next year, promising some £60m a year in cost savings.

David Hobbs, Cofunds’ chief executive who will continue to run the business, said: “The combination of Aegon’s retirement expertise and technology alongside our deep knowledge and experience of platforms positions us uniquely in the market."

Aegon has already added £12bn of Blackrock workplace pensions onto ARC this year and yesterday said its own assets had risen from £7.8bn to £9bn in the second quarter.

Both the Blackrock and Cofunds businesses will continue to run operationally from their English bases, but Aegon’s combined £100bn of platform assets will outstrip nearest rival Skandia on £60bn and Standard Life, which with its current acquisition of Axa’s £11bn will have £39bn of assets.

Mr Grace, who told The Herald last year he wanted Aegon to be the number one platform player, said: “We always knew that building the right technology would create opportunities and here we are the largest in the market.”

Admitting it would be “the biggest integration that has ever been done in the industry”, Mr Grace said the Edinburgh business already had a track record. “We have already upgraded over 200,000 customers onto the new technology, it is not something we haven’t done before. What customers get is a better experience, advisers get a broader product range, and it’s a win win for everybody.” He said Aegon hoped to upgrade a further 600,000 of its own customers over the next 18 months.

Mr Grace said the timing of the deal had been perfect. “These are not great conditions to build a traditional life and pensions business, we have sold our annuity portfolio just before Brexit, moving out of a portfolio which was very dependent on interest rates, we are now in a model which is less reliant on them and more reliant on long-term investment and savings. It’s a fee-based model more dependent on the equity market and if you look at that market it is very positive timing.”

He added: “In the second quarter we delivered earnings of nearly £9m ...the protection business also performed strongly with sales up nine per cent compared with the same period last year.”

Mr Grace took over in 2011 after a year in which outgoing chief Otto Thoresen presided over a 60per cent fall in profits and the axing of 600 jobs in Edinburgh.

The former HBOS executive unveiled plans to invest in a platform in early 2014, with the newest technology and a commitment to putting workplace pensions on the same interface as advised assets and a non-advised direct portal.