One of Scotland’s biggest financial services businesses could be sold to one buyer or broken up, writes TERRY MURDEN
Some of the country’s blue chip pensions and wealth management companies will spend the festive season ruminating over a bid for one of Scotland’s biggest financial services businesses after Dutch group Aegon last week announced it was reviewing the future of its UK operations. The talk is of a £1.2 billion to £3bn transaction depending on whether it is sold as an entire unit or broken up.
There is unlikely to be much movement until the spring or early summer but when it happens it will mark a significant milestone in Scotland’s financial services sector which was last hit by major disruption when Standard Life Aberdeen (now Aberdeen Group) sold its brand to Phoenix and returned to its former offices in Edinburgh’s Lothian Road.
Aegon’s UK business, focused around workplace pensions and advice, has been based in Edinburgh since 1994 when the group acquired a 40% stake in Scottish Equitable. It purchased the remaining shares by 1998. It initially occupied Scottish Equitable’s St Andrew Square offices, until moving to the Gyle on the western edge of Edinburgh.
In those early days, surveys revealed that consumers thought Aegon was a white goods producer, manufacturing fridges and washing machines. Despite being a one-time title sponsor of the Queens tennis tournament – when it was won by Andy Murray – it remains one of the biggest financial services companies that many have never heard of.
Lloyds, Phoenix, Royal London and M&G are tipped as buyers, though they have different priorities. Lloyds and Phoenix are the most likely acquirers of the entire business, says analysts, who believe a break up would probably double the going price over a whole business sale.
The Aegon Group announced it was reviewing the UK unit as part of an announcement of its decision to leave the Netherlands and move to the US where it will adopt the Transamerica brand, its biggest subsidiary. Transamerica was acquired in 1999 for $9.9 billion. At the time it was the largest foreign takeover by a Dutch company. Aegon earns around 70% of its revenue in the US and said this summer that it was exploring a move across the Atlantic.
Its expansion in the US had led shareholders to question the logic of a Dutch holding company overseeing a much larger American subsidiary. That debate accelerated after Lard Friese took over as chief executive in 2020. Friese has spent the past five years selling off major Aegon operations, including its Dutch division, and oversaw the company’s departure from its long-time base in The Hague to Schiphol airport.
Aegon’s share price has risen by around 130% since Friese took charge. After Wednesday’s announcement the shares fell 8%.
However, its performance has been encouraging and will help it get a good price for the UK business which delivered a strong first half of 2025, with rising workplace pension inflows and early signs of progress in its adviser platform strategy helping underpin the group’s wider return to profitability.
The UK arm, which employs about 2,500 staff, reported workplace net flows of £2.1bn in the six months to 30 June, up 24% from £1.7bn in the same period last year.
Net flows on its adviser platform improved by 18% year on year, though the business remains in overall outflow.
Total assets under administration (AUA) rose 4% to £226bn, while the two platforms together grew assets by 7%.
At group level, Aegon reported net profit of €606m, reversing a €65m loss in the first half of 2024.
“Over the past five years, we have successfully transformed Aegon into a strong, focused, well-performing group,” Friese said last week. “Now, we are ready for the next frontier: to fully capture the opportunities in the largest life insurance market in the world: the US.”
Terry Murden was Scotland Editor and Business Editor at The Sunday Times, Business Editor at The Scotsman, and Business and City Editor at Scotland on Sunday. He is now Editor of Daily Business
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