Merger deal looms for Widows

PENSIONS giant Scottish Widows is close to agreeing a deal which could see it merge with rival firm Standard Life, it was reported yesterday.

Talks about a potential link-up between two of Scotland’s largest financial companies are expected to begin this week.

The possible deal between the Edinburgh-based firms is believed to be strongly linked to Standard Life’s forthcoming merger with Aberdeen Asset Management (AAM), which will create one of the world’s largest investment groups.

It is understood Lloyds Banking Group, which owns Scottish Widows, has been considering options for offloading the business as new regulations mean the bank is penalised for owning a life assurer.

Lloyds has close ties with AAM, which bought the fund management arm of Scottish Widows in 2013. The deal meant that Lloyds took a 10 per cent stake in AAM.

Both Standard Life and Scottish Widows last night said they would not comment on ‘speculation’.

However, Standard Life’s latest shareholder prospectus states: ‘Aberdeen and Lloyds have enjoyed a strong business partnership and Lloyds remains a key customer of Aberdeen. It is the intention that the Combined Group will explore ways in good faith to build a successful relationship with Lloyds for the benefit of their respective customers, businesses, shareholders and other stakeholders.’

Scottish Widows opened in 1815 in Edinburgh as a general fund for securing provisions for widows, sisters and other female relatives of soldiers fighting in the Napoleonic wars. It was bought for £7billion by Lloyds in 1999.

Standard Life employs 5,000 of its 6,500strong global workforce in Scotland.