STANDARD Life Aberdeen is selling the brand with which the group and forerunners have been associated for almost 200 years as the group increases its focus on asset management.
The Edinburgh-based giant has agreed to sell the Standard Life brand to the Phoenix group during this year as part of a complex deal. Phoenix said this will result in Standard Life Aberdeen (SLA) paying it £115 million cash.
Standard Life Aberdeen is working on plans for a new brand which it expects to unveil later this year.
The deal announced yesterday comes three years after Phoenix Group acquired the pensions business that operates under the Standard Life brand, for £3.2bn following the merger between the former Standard Life plc and Aberdeen Asset Management.
READ MORE: Standard Life Aberdeen wins backing for transformational sale of pensions arm
The group formed through the merger decided to focus on asset management although Standard Life has been associated with pensions since the business was founded in 1825.
The group retained exposure to the pensions business through a stake in Phoenix and held on to the Standard Life brand.
The decision to sell the brand has been announced months after former Citigroup executive Stephen Bird took charge at Standard Life Aberdeen.
Mr Bird said: “The “Standard Life” brand has an important heritage. In the UK, it has strong recognition as a life insurance and workplace pensions brand. This is closely aligned with Phoenix’s strategy and customer base. This is much less the case with the business we are building at Standard Life Aberdeen which is focused on global asset management.
He added:” I am excited about the work we are doing on our own brand, which we look forward to sharing later this year”.
Mr Bird said the deal simplified the relationship between Standard Life Aberdeen and Phoenix Group in a way that would allow them to work together constructively as partners for at least the next ten years.
Phoenix has agreed to extend the term of the agreement under which Standard Life Aberdeen manages around £147 billion funds for the business by 2.5 years, to 2031.
Standard Life Aberdeen will retain a 14 per cent stake in Phoenix. It will acquire Wrap businesses that provide services in areas such as self-invested personal pension plans (SIPPS), which passed to Phoenix as part of the 1918 transaction.
Phoenix will take over some services which were previously provided by Standard Life Aberdeen. It will have greater freedom to develop products to sell under the Standard Life brand.
READ MORE: Wealth manager eyes acquisitions in Scotland
The company said that the deal would allow it to accelerate the delivery of a broader set of product and service propositions to meet the financial needs of customers.
Around 60 SLA staff in areas such as marketing will transfer to Phoenix, which said it was committed to investing in the Standard Life business.
Asked if there would be any job cuts as a result, a spokesperson for Phoenix said: “No. We are firmly committed to our operations in Scotland and will continue to grow our Open Business from our operational base at Standard Life House in Edinburgh.”
It employs around 2,800 in Edinburgh.
Standard Life Aberdeen said no posts would be made redundant as a result of the deal. It employs around 4,000 people in Edinburgh.
Standard Life operated as a mutual owned by its members until 2006. The group became a limited company owned by shareholders that year and floated on the London Stock Exchange.
Keith Skeoch and Martin Gilbert, who ran Standard Life and Aberdeen Asset Management at the time of the merger served as joint chief executives of the enlarged group initially.
Mr Gilbert stepped down as joint chief executive in March 2019. He departed SLA last year after a spell as vice-chairman.
READ MORE: Scots asset management heavyweight Martin Gilbert joins board of London funds business
Mr Bird became chief executive in November when Mr Skeoch stepped down at the age of 64.
When his appointment was announced in July, Mr Bird described Standard Life Aberdeen as a company with “a great history, a strong brand, and an exciting future”.
Standard Life Aberdeen has around £510bn assets under management or administration.
Shares in the group closed down 5p at 321.2p.
Phoenix Group shares closed up 5.6p at 715.6p.
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