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Failed talks pushed Widows to drop Standard Life Aberdeen

Scottish Widows’ decision to pull £109 billion mandate from Standard Life Aberdeen last week reportedly followed collapse in merger talks between the two.

 
Failed talks pushed Widows to drop Standard Life Aberdeen

Scottish Widows' decision to pull a £109 billion investment contract from Standard Life Aberdeen (SLA) last week was linked to failed merger talks between the two.

According to the Sunday Times, talks between the Lloyds' (LLOY) pension and insurance subsidiary and Standard Life Aberdeen collapsed just before Christmas due to differences over the structure of the new operation.

The discussions are understood to have commenced in June, just after the mega-merger between Standard Life and Aberdeen Asset Management was approved.

At the time, The Times  reported that a follow-up deal for Scottish Widows was the brainchild of Aberdeen chief executive Martin Gilbert and Standard Life chairman Sir Gerry Grimstone (pictured above right and left).

It is said that Lloyds boss Antonio Horta-Osorio felt he had little choice but put the mandate on the market last week after negotiations foundered.

The Widows contract represented a substantial chunk of the £646.2 billion Standard Life Aberdeen reported managing at the end of last year.

The cash was run within the company following the Aberdeen group’s 2013 acquisition of Scottish Widows, which was hailed at the time as creating a key strategic partnership for the business.

‘We are disappointed by this decision in the context of the strong performance and good service we have delivered for LBG, Scottish Widows and their customers,’ Aberdeen Standard Life co-chief executives Keith Skeoch (pictured left) and Martin Gilbert (right) said in a statement following the news.

In its statement Scottish Widows said it was uncomfortable with its assets being run by a ‘material competitor’ following the merger of Standard Life and Aberdeen. '[Therefore] we will begin an in-depth assessment of the market to identify a long-term strategic partner, or partners, to manage the current £109 billion of assets,’ the bank said. 

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