SLA to return £1.75bn to investors

Standard Life Aberdeen is to return up to £1.75 billion to shareholders following the sale of its European insurance business to Phoenix Group.

The Scottish financial giant said earlier this year that it would offload Standard Life Assurance to its rival, with the asset management giant receiving £2.3bn in cash and a 19.9% slice of the Phoenix business.

Standard Life Aberdeen’s board now expects there will be “surplus capital” within the group as a result of the deal and lower capital requirements.

The group said it intended to return £1bn by way of a B share scheme.

A further up to £750m will be returned via a share buyback programme.

“The last year has been a period of significant change for Standard Life Aberdeen, with the proposed sale of the UK and European insurance businesses completing our transformation to a capital light investment company,” SLA chairman Sir Gerry Grimstone said.

“The cash generated from the sale will enable us to continue to invest in the development of our business and also to return surplus capital to shareholders,” he added.

As part of the deal, Phoenix will take on the UK mature retail and spread/risk books and the Europe, UK retail and workplace operation, while Standard Life Aberdeen will hold on to the UK retail platforms and financial advice business.

Standard Life Aberdeen said a shareholder circular regarding the proposed transaction and return of capital will be published today.

A meeting to approve the scheme will take place on June 25. The group’s full AGM was held yesterday and all resolutions were passed on a vote.

Shares closed down at 350.8p last night.

Standard Life Aberdeen chairman Sir Gerry Grimstone.