Aberdeen Asset Management is in talks to buy Scottish Widows Investment Partnership from Lloyds Banking Group, according to three people with knowledge of negotiations.
Aberdeen has joined the race for the money management arm of Scottish Widows, said the people who asked not to be identified because the matter hasn't been made public. The acquisition of Scotland's third-largest fund manager would make Aberdeen Europe's biggest publicly traded fund company, with assets of about £350 billion ($561 billion).
Lloyds CEO Antonio Horta-Osorio is seeking to strengthen the firm's balance sheet by selling assets, cutting costs and eliminating jobs following the bank's government bailout in 2008. Britain's largest mortgage lender, based in London, purchased Scottish Widows, which runs both a life insurance business and the SWIP fund-management operation, for £7.3 billion in 2000.
“I don't think it would go down well with investors,” said David McCann, a London-based analyst at Numis Securities. “Given what (Aberdeen has) said so many times, the credibility of the management would fall through the floor.”
Aberdeen CEO Martin Gilbert said in April that a bid for the fund manager was “highly unlikely.”
Macquarie Group, Australia's largest investment bank, is among companies weighing an offer for SWIP, said two of the people. Royal Bank of Canada, the country's largest lender by assets, and Natixis, the French investment bank and money manager, are also considering a bid, three people familiar with the potential offers said in June.
Lloyds hired Deutsche Bank to advise on the sale of the unit, according to the unnamed sources. It had £145.8 billion of assets under management as of June 30.
Officials at Lloyds, Aberdeen, Macquarie, RBC, Natixis and Deutsche Bank all declined to comment.
Aberdeen oversaw £201.7 billion as of Aug. 31.
In 2008, Aberdeen paid £250 million in 2008 to acquire from Credit Suisse Group 75 billion Swiss francs ($82 billion) in assets under management and divisions in Europe, the U.S. and Asia.
