The Financial Conduct Authority, the UK regulator, has given the green light to Aberdeen Asset Management, the UK-listed business, to buy Scottish Widows Investment Partnership.

The Financial Conduct Authority, the UK regulator, has given the green light to Aberdeen Asset Management, the UK-listed business, to buy Scottish Widows Investment Partnership. Aberdeen had agreed to buy SWIP from its parent, Lloyds Banking Group, last November.  

The acquisition is expected to complete after the closing of the business on 31 March.  On 1 April the company expects to issue a statement confirming the completion has taken place and to issue a trading update on the same day.   

"The deal combines and broadens the investment capabilities of both businesses. The combined business will have a far stronger and more diverse range of investment management skills as well as significant scale across asset classes and geographies, which will enable us to deliver an even better service for our enlarged client base. This includes investors who will benefit from yesterday's Budget announcement giving them more freedom to invest their pension pots when they retire," said Martin Gilbert, chief executive, Aberdeen Asset Management.  

The sale is for an initial consideration, payable in Aberdeen shares, of around £560 million ($903.4 million), with a further deferred consideration, payable in cash, of up to £100 million.

The agreement represents one of the most significant moves to date by Lloyds to spin off parts of its business as the bank seeks to return to full private ownership.

Compared to its plight at the beginning of the century when it was hit with losses in the capital investment trust business, the purchase of SWIP represents a remarkable recovery in fortunes for Aberdeen.  

The Lloyds-Aberdeen agreement is an example of transactions caused by moves by firms to recover from post-crisis problems.  

The deal also comes at a time of continued merger and acquisition activity in the wealth and asset management industries.  In recent days there has been the purchase by Singapore-based DBS of the Asian private bank of Societe Generale, and the merger of multi-family office SandAire and private investment office Lord North Street. Other deals have included Old Mutual Wealth’s acquisition of Intrinsic, a network of independent financial advisors.