Aberdeen to takeover Lloyds fund management unit

Written By Unknown on Senin, 18 November 2013 | 23.16

LONDON — Shares in Aberdeen Asset Management PLC surged Monday after the company struck a deal with Lloyds Banking Group PLC that analysts say will make it Europe's biggest independent fund manager.

In a statement, Aberdeen said it will buy Lloyds' asset management unit Scottish Widows Investment Partnership for around 550 million pounds ($885 million) in shares.

In return, Lloyds — still around one-third owned by the British government following a bailout — will get a 9.9-percent stake in Aberdeen. The two will also form a long-term strategic partnership whereby Aberdeen will manage assets on behalf of Lloyds.

Lloyds said it will be a "supportive" shareholder and has committed to maintain its initial shareholding in Aberdeen for at least a year, and a third of it for at least three years.

Aberdeen could make a further 100 million pounds cash payout to Lloyds over five years if certain performance criteria are met. The sale, which is expected to be completed early next year following the necessary regulatory approval, does not include Scottish Widows, Lloyds' life, pensions and investment business.

"We are confident that this transaction will deliver considerable additional value to our expanded client base and this will therefore benefit our shareholders," said Martin Gilbert, Aberdeen's chief executive.

Investors cheered the prospect of another 136 billion pounds worth of funds being added to Aberdeen's current portfolio of around 200 billion pounds. Aberdeen shares were up 14.1 percent to 487 pence in London.

"After the completion of this acquisition Aberdeen Asset Management will become the largest fund management firm in Europe," said Alastair McCaig, an analyst at IG.

For Lloyds, McCaig said the deal is another step the bank has taken to "reorganize its portfolio of exposure." Shares in Lloyds rose 1.4 percent to 76 pence.

Lloyds had to be bailed out by the British taxpayer at the height of the banking crisis in 2008 but has recently shown signs that it is healing. The government recently sold some of its stake in the bank.


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