Scotland-based Standard Life is reportedly engaged in talks to acquire Ignis Asset Management, from Phoenix Group, in a deal which might be valued at nearly £400m ($660m).
The takeover of Ignis, which manages fixed income, equity and real estate assets worth £67bn, is part of the life insurer’s strategy to diversify revenue channels, as it moves away from its traditional life insurance business to more investments for outside clients.
A statement by Standard Life was quoted by Reuters as saying, "Discussions are ongoing and there can be no certainty that any transaction will be agreed. Standard Life Plc will make further announcements if and when appropriate."
The decision to acquire Ignis comes at a time, when the company had warned that it would take "whatever action we consider necessary – including transferring parts of our operations from Scotland – in order to ensure continuity and protect the interest of our stakeholders."
Apart from further consolidating Standard’s position in the UK fund management sector, the transaction will boost Standard Life’s investment business’ assets under management to more than £250bn.
If the proposed transaction materializes, it will enable Phoenix to slash its leverage, measured as debt to rooted value to under 40% by 2016.
It will further strengthen Phoenix’s plan to trim down its £2bn of net debt, while enabling it to purchase life insurance businesses that are closed to new customers.
Image: Standard Life’s head office building in Edinburgh. Photo: courtesy of Stefan Schäfer, Lich.