Phoenix Group to acquire full ownership of Standard Life brand

Phoenix Group has entered into a new binding agreement with Standard Life Aberdeen, it announced on Tuesday, which will see it sell its SLAL UK investment and platform-related products to Standard Life Aberdeen, and acquire ownership of the Standard Life brand.

As a result, the client service and proposition agreement entered into at the time Phoenix purchases Standard Life Assurance (SLAL) in 2018 will be dissolved.At the same time, Phoenix said it would re-commit to a 10-year strategic asset management partnership, with Phoenix to use Aberdeen Standard Investments' expertise across a breadth of portfolio management and investment strategy areas.

Under the terms of the transaction, Phoenix said it will sell its SLAL UK investment and platform-related products, comprising Wrap self invested personal pension (Wrap SIPP) and Onshore Bond and UK Trustee Investment Plan (TIP) to Standard Life Aberdeen, and acquire ownership of the Standard Life brand.

Ownership of the Standard Life brand was described by the board as a “key enabler” for delivering the company’s growth strategies at pace.

The relevant marketing, distribution and data team members would transfer from Standard Life Aberdeen to Phoenix, to support the delivery of a more cohesive experience for customers, clients and their advisers.

By investing in the Standard Life brand, Phoenix said it would accelerate the delivery of a broader set of product and service propositions and be better positioned to take advantage of opportunities arising through the shifting landscape of the long-term savings and retirement market.

Through the transaction, the company said it would receive £115m of cash consideration as well as ownership of the Standard Life brand, with Phoenix and SLA to resolve all legacy issues in relation to the acquisition.

The majority of the cash consideration was payable on announcement, while completion of the sale of the investment and platform-related products would be effected through a transfer in late 2022.

Phoenix said the impact of the transaction on its Solvency II surplus and shareholder capital coverage ratio as well as IFRS operating profit was expected to be broadly neutral, with a net £0.2bn reduction in long-term free cash.

“This agreement is a natural progression of our strong strategic partnership with SLA and significantly simplifies our relationship,” said chief executive officer Andy Briggs.

“I am delighted that Phoenix now owns all of the life and pensions business of Standard Life, including the brand and all distribution and marketing, and we are committed to investing in this business.”

Briggs said it would enable Phoenix to accelerate the delivery of a broader set of product and service propositions to meet the financial needs of customers.

“This is therefore a key enabler of our ‘open’ business growth strategy and will support the delivery of incremental new business long-term cash generation.”

At 0957 GMT, shares in Phoenix Group Holdings were up 0.3% at 712.14p.