Aegon, an international life insurance, pensions and asset management group headquartered in the Netherlands, has agreed to sell its UK operations to Standard Life plc in a transaction valued at £2.0 billion.
The deal brings to a close Aegon’s strategic review of its UK business and supports its stated aim of focusing on becoming a leading life insurance and retirement provider in the United States.
The total consideration comprises a 15.3% shareholding in Standard Life, equivalent to 181.1 million shares, alongside £750 million in cash. Any funds distributed from Aegon UK between signing and completion will be deducted from the cash portion.
The valuation represents approximately 14.2 times the expected 2025 operating result after tax and 1.9 times projected 2025 IFRS shareholders’ equity. Proceeds from the transaction are intended to be used to reduce debt and fund share buybacks once the sale has completed.
Aegon indicated that its financial targets for 2026 and 2027, originally outlined at its Capital Markets Day in 2025, will be updated to reflect the disposal. Growth expectations will remain unchanged, although they will be recalibrated from a revised base.
The group expects operating results to increase by around five per cent annually between 2025 and 2027, based on a pro forma 2025 range of €1.3 billion to €1.5 billion. Operating capital generation after holding funding and expenses is projected to grow between zero and five per cent over the same period, from a base of €0.7 billion to €0.75 billion.
Free cash flow is also expected to rise by around five per cent per year, with adjustments made from 2026 onwards to exclude the UK contribution and include income linked to the equity stake received in Standard Life. Dividend per share is forecast to increase by more than five per cent annually, in line with previous guidance.
Aegon’s UK asset management activities will remain part of its global asset management division and are expected to continue as a key partner to the combined business following completion. The agreement also allows Aegon to appoint one non-executive director to the board of Standard Life.
On a pro forma 2025 basis and before any capital management actions, the transaction is expected to reduce Aegon’s group solvency ratio by around five percentage points. However, it is anticipated to increase shareholders’ equity by approximately €1.1 billion, while reducing valuation equity by €0.1 billion due to the loss of contractual service margin. The net impact on group earnings is expected to be positive, at around €0.6 billion.
Until the transaction is completed, Aegon UK will no longer contribute to the group’s operating result or operating capital generation, with its IFRS performance reported under other income or charges. The deal is expected to complete towards the end of 2026, subject to regulatory approvals and customary conditions.
Following completion, Aegon will be subject to a lock-up period on the shares it receives, lasting up to 18 months or until the company completes its planned redomiciliation to the United States, whichever occurs sooner.
Lard Friese, Aegon CEO, said: “The transaction represents an important step in our ambition to become a leading US life insurance and retirement group. The terms reflect our commitment to creating value for shareholders, and through our shareholding we will benefit from further value creation in the combined business.
“Standard Life is the right owner for Aegon UK and a good home for our employees: we share the same values and a strong commitment to customers, and together the businesses will create the UK’s largest retirement savings and income provider. Aegon’s asset management business in the UK will remain an important asset management partner to the new combined business.”
Andy Briggs, Standard Life CEO, added: “With financial wellbeing at the heart of everything it does, Aegon UK’s values and culture are aligned with our own. Together, we will not only be stronger, we will be better – helping our customers achieve better outcomes and greater financial security in later life. I look forward to welcoming everyone in Aegon UK to Standard Life in due course and working together to capture the huge potential in front of us.”
