Royal London, one of many UK’s greatest monetary companies mutuals, is plotting a bid for a £6bn bulk annuities portfolio being bought by Lloyds Banking Group.
Sky News has learnt that Royal London, which referred to as off a controversial merger with rival LV= – previously Liverpool Victoria – in 2022, is in talks a couple of deal that will symbolize its biggest-ever acquisition.
City sources stated on Thursday that Royal London, based in 1861, was amongst a small variety of events anticipated to submit bids subsequent week for the majority annuities arm of Scottish Widows, which is wholly owned by Lloyds.
Royal London describes itself because the UK’s largest mutual life, pensions and funding firm, and has greater than 2m members.
Last 12 months, it purchased Aegon UK’s particular person safety enterprise, which noticed 400,000 clients switch to the mutual.
It has additionally stated publicly that it could discover additional alternatives in annuities.
Analysts stated that Rothesay, the specialist insurer, was probably the most logical purchaser of the Scottish Widows portfolio given its sturdy place within the sector and sturdy steadiness sheet.
A variety of different events are additionally stated to have expressed an curiosity.
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Bloomberg reported in November that Lloyds was exploring a sale, and had employed Morgan Stanley and Fenchurch Advisory Partners to supervise the method.
Scottish Widows entered the majority annuity market in 2015, and has constructed a market share of roughly 4% – making its presence modest in comparison with the likes of Legal & General, Pension Insurance Corporation and Rothesay, which every account for between 20% and 25% of the market.
Aviva can be a sizeable participant, with a market share of about 15%.
One supply near the method stated that disposing of the majority annuities enterprise would allow Scottish Widows to give attention to rising its core office, particular person pensions and direct-to-consumer insurance coverage and investments propositions.
That would replicate Lloyds’ broader strategic priorities underneath chief government Charlie Nunn, they added.
Lloyds and Royal London each declined to remark.
Source: information.sky.com”