Standard Life (SDLF) M&A announcement summary

Deal rationale and strategic fit

• Acquisition accelerates ambition to become the UK's leading retirement savings and income business, creating the largest player with 16 million customers and up to £480 billion in assets under administration.

• Establishes a scale leader in workplace and retail markets, elevating the group to #2 in both segments.

• Enhances digital, advice, and distribution capabilities, broadening product range and customer engagement.

• Strong cultural and strategic alignment, focused on customer-centric solutions and improved financial well-being.

Financial terms and conditions

• Total consideration of £2 billion for 100% of Aegon UK, funded by £750 million cash (including £650 million debt) and 181.1 million new shares issued to Aegon, making Aegon a 15.3% shareholder.

• Valuation at 0.83x price to 2025 unrestricted Tier 1 capital (£2.4 billion UT1 FY25); share issuance price based on 30-day VWAP of 690p.

• Aegon’s shareholding subject to an 18-month lock-up or until re-domiciliation to the US.

• Transaction is subject to regulatory approvals but not contingent on a shareholder vote.

Synergies and expected cost savings

• Total net synergy value of £0.8 billion, including £110 million annual pre-tax cost savings and £340 million capital synergies.

• Over half of synergies expected by end-2029, fully achieved by end-2031; total undiscounted synergies valued at £1.2 billion before one-off costs.

• Synergies primarily from operational rationalisation, platform alignment, and capital diversification.

• Additional £0.4 billion excess cash generated over five years.

• One-off post-tax integration costs of £0.3 billion and £0.1 billion separation costs.