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 In a statement, Aberdeen said it will buy Lloyds' asset management
unit Scottish Widows Investment Partnership for around 550 million
pounds ($885 million) in shares.
In return, Lloyds — still around one-third owned by the British
government following a bailout — will get a 9.9-percent stake in
Aberdeen. The two will also form a long-term strategic partnership
whereby Aberdeen will manage assets on behalf of Lloyds.
Lloyds said it will be a "supportive" shareholder and has committed
to maintain its initial shareholding in Aberdeen for at least a
year, and a third of it for at least three years.
Aberdeen could make a further 100 million pounds cash payout to
Lloyds over five years if certain performance criteria are met. The
sale, which is expected to be completed early next year following
the necessary regulatory approval, does not include Scottish Widows,
Lloyds' life, pensions and investment business.
"We are confident that this transaction will deliver considerable
additional value to our expanded client base and this will therefore
benefit our shareholders," said Martin Gilbert, Aberdeen's chief
executive.
Investors cheered the prospect of another 136 billion pounds worth
of funds being added to Aberdeen's current portfolio of around 200
billion pounds. Aberdeen shares closed 14.7 percent higher at 490
pence in London.
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"After the completion of this acquisition Aberdeen Asset Management
will become the largest fund management firm in Europe," said
Alastair McCaig, an analyst at IG.
For Lloyds, McCaig said the deal is another step the bank has taken
to "reorganize its portfolio of exposure." Shares in Lloyds rose 1.1
percent to 76 pence.
Lloyds had to be bailed out by the British taxpayer at the height of
the 2008 banking crisis but has recently shown signs that it is
healing. The government recently sold some of its stake in the bank.
[Associated
Press; PAN PYLAS]
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