Legal & General Group ruled out bidding for Lloyds Banking Group's Scottish Widows Investment Partnership as it posted first-quarter cash flow that beat analysts' estimates.
“It doesn't really fit with our current strategy for the business,” CEO Nigel Wilson said on a conference call with reporters Thursday, when asked about SWIP. “We won't be making opportunistic acquisitions.”
Legal & General is seeking to strengthen its position in the U.K.'s long-term savings market through acquisitions as the government encourages Britons to save privately for their pensions. The firm in March agreed to buy Cofunds Holdings Ltd., an electronic savings portal, with the CEO saying Thursday that the insurer has “a large amount of funds available” for purchases.
“The issue is making sure we do the right deals,” Mr. Wilson said. “This industry, in its wider sense, is littered with failed acquisitions. We're very determined not to be part of that very large group.”
Mr. Wilson's comments echo those of Aberdeen Asset Management CEO Martin Gilbert, who said Scotland's largest money manager is “highly unlikely” to buy SWIP. “It would make something especially attractive for us to make a large acquisition,” he said Monday.
Lloyds, Britain's largest mortgage lender, is weighing a sale of its Scottish Widows unit, which manages about £142 billion ($221 billion) of mainly U.K. insurance and pension assets, four people with knowledge of the matter said in April. With a large amount of index-linked funds, the business would fit with Legal & General's investment management unit, according to David McCann, an analyst at Numis Corp.