Following its series of acquisitions, Aberdeen Asset Management PLC has agreed to buy, Scottish Widows Investment partnership, asset Management arm of Lloyds Bank. The deal will be a combination of cash and stock worth of 660 million pounds of US$1.06 billion.
Lloyds will initially receive 9.9% stake in Aberdeen Asset Management PLC. With reference to closing price of Friday November 15, 2013 of £426.80, this comes out to £560 million. Moreover Lloyds can abandon this sale if Aberdeen stock's price drops below £320. The rest of £100 million will be paid over a period of 5 years based upon the growth of business generated by two firms.
Scottish widows investment partnership (SWIP) was acquired by Lloyds group in 2000 for £7 billion. The acquisition was aimed at increasing the offerings of life insurance and asset management products. But post-lehman effects have caused Lloyds to move forward to sell SWIP in 2009. But same didn't materialize, with Lloyds receiving government bail-out package. Government has sold its stake worth £3.2 billion, prior in this year.
Aberdeen Asset Management is a Scotland based assent management company with majority of operations and revenue from UK. It was established in 1983 and has gone through organic growth strategy from past few years. Aberdeen has £200.4 billion in Asset under Management as of September 30, 2013. In addition, this deal is expected to add £136 billion in the same and £234 million in annualized revenue. This partnership is expected add to the scale across many asset classes' investment for Aberdeen Asset Management.
Lloyd is expected to gain about £190 million gain from this acquisition. This deal expected to complete by Q1 2014.
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