Aegon is to pay Legal & General £140m for Cofunds and the Investor Portfolio Service (“IPS”) platform.
The deal is expected to complete in December after regulatory approval.
A statement this morning from Legal & General said that it had been working closely with Aegon to deliver three mutually beneficial transactions. Firstly, the acquisition of Aegon’s £2.9bn back book annuity portfolio; secondly, the five-year distribution agreement to provide individual annuities to Aegon pension customers; and, thirdly, the acquisition of Cofunds and IPS by Aegon.
Group Chief Financial Officer of Legal & General Mark Gregory said: “Over the last few years Legal & General Investment Management (LGIM) has developed a market leading international defined contribution pension platform business. LGIM manages £50bn in UK and US defined contribution pension assets, and plans to expand into the DC market of Asia. Cofunds is at the point where it requires a significant upgrade in technology to exploit its leadership position in the UK platform market. We have concluded that this long term commitment is best achieved under Aegon’s ownership as a specialist wealth platform provider.”
Legal & General also said in the statement that the sale of Cofunds and IPS to Aegon does not impact upon its relationship with building society Nationwide. It also confirmed that its Solvency II surplus, as at the 30 June 2016, was estimated at £5.3bn, and that the sale of Cofunds will increase the Solvency II surplus by £125m, and its Economic Capital surplus by £105m.