Netherlands-based international life insurance, pensions and asset management group Aegon has agreed to sell its UK business to Standard Life in a deal worth £2 billion.
The transaction concludes the global insurance group’s strategic review of its UK business and supports its stated ambition to become the leading life insurance and pensions provider in the US.
The total consideration includes a 15.3% stake in Standard Life, equivalent to 181.1 million shares, and £750 million in cash. Any funds allocated from Aegon UK between signing and completion will be deducted from the cash component.
This valuation is approximately 14.2 times the expected after-tax operating results in 2025 and approximately 1.9 times the expected IFRS shareholder equity in 2025. Proceeds from the transaction will be used to reduce debt and fund share repurchases upon completion of the sale.
Aegon said its 2026 and 2027 financial targets initially outlined at Capital Markets Day 2025 will be updated to reflect the disposal. Growth is expected to remain unchanged but will be rescaled from a revised base.
The group expects operating results to grow by approximately 5% annually from 2025 to 2027, based on a forecast range of 1.3 billion to 1.5 billion euros in 2025. Working capital generation after holding funds and fees is expected to increase between 0% and 5% over the same period, from €700 million to €750 million.
Free cash flow is expected to grow by around 5% annually from 2026, adjusted to exclude the UK contribution and include income related to Standard Life equity. Dividends per share are expected to grow by more than five percent annually, in line with previous guidance.
Aegon’s UK asset management activities will remain part of its global asset management division and is expected to remain a key partner in the combined business post-merger. The agreement also allows the global insurance group to appoint a non-executive director to the Standard Life board.
On a projected 2025 basis, before any capital management actions, the transaction is expected to reduce Aegon’s group solvency ratio by approximately 5 percentage points. However, shareholders’ equity is expected to increase by approximately EUR 1.1 billion, while valuation equity will decrease by EUR 100 million due to loss of profits on contract services. The net impact on group earnings is expected to be positive at approximately €600 million.
Until the transaction is completed, Aegon UK will no longer contribute to the group’s operating results or working capital generation and its IFRS results will be reported under other income or expenses. The transaction is expected to close by the end of 2026, subject to regulatory approvals and customary conditions.
Upon completion, the shares received by Aegon will be subject to a lock-in period of up to 18 months, or until the company completes its planned relocation to the United States, whichever is earlier.
Aegon CEO Lard Friese said: “This transaction represents an important step in our ambition to become the leading life insurance and retirement group in the United States. These terms reflect our commitment to creating value for our shareholders and through our ownership we will benefit from further value creation in the combined business.”
“Standard Life is the right owner for Aegon UK and a great home for our people: we share the same values and strong commitment to our customers, and together the two companies will create the UK’s largest provider of retirement savings and income. Aegon’s UK asset management business will remain a key asset management partner to the new combined business.”
Andy Briggs, chief executive of Standard Life, added: “Financial wellbeing is at the heart of everything we do and Aegon UK’s values and culture are aligned with ours. Together we will not only become stronger but better, helping our customers achieve better outcomes and greater financial security later in life. I look forward to welcoming everyone at Aegon UK to Standard Life when the time is right and working together to seize the huge potential ahead of us.”
