LEGAL & GENERAL TO SELL COFUNDS AND IPS TO AEGON
Legal & General Group Plc ("Legal & General") has today announced the sale of Cofunds, the UK's leading investment platform for advisers and other financial institutions, to Aegon for £140m. The acquisition is subject to regulatory approval, which is expected by December 2016. The sale includes the Investor Portfolio Service ("IPS") platform as well as Cofunds' retail and institutional business. All employees in Cofunds and IPS will be transitioned to Aegon.
Legal & General and Aegon have worked closely this year in delivering three mutually beneficial transactions: the acquisition of Aegon's £2.9bn back book annuity portfolio, the 5 year distribution agreement to provide individual annuities to Aegon pension customers, and the acquisition of Cofunds and IPS by Aegon.
Mark Gregory, Group Chief Financial Officer of Legal & General, 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."
The sale of Cofunds and IPS to Aegon does not impact Legal & General's relationship with Nationwide, the UK's largest building society.
Legal & General's Solvency II surplus, as at the 30 June 2016, was estimated at £5.3bn. The sale of Cofunds will increase the Solvency II surplus by £125m, and its Economic Capital surplus by £105m.
Ends
For further information, please contact:
Investors:
Laura Doyle Head of Investor Relations 020 3124 2088
Sujee Rajah Investor Relations Manager 020 3124 2047
Media:
Richard King Head of Group Corporate Communications 020 3124 2095
Doug Campbell Tulchan Communications 020 7353 4200
Notes to editors:
In May 2013 Legal & General acquired the remaining 75% of Cofunds it did not previously own for £131m. The original 25% was acquired for £22m. Cofunds AUA was circa £54bn including IPS of circa £9bn in May 2013. As at June 30 2016, Cofunds AUA was £77.5bn including IPS AUA of £10bn. The net loss on disposal including IPS is circa £65m. The number of Cofunds and IPS employees is circa 830.
Legal & General Group Plc:
Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £12.5bn (as at 10 August 2016) and is responsible for investing £841.5bn worldwide (as at 30 June 2016) on behalf of investors, policyholders and shareholders. Legal & General has over seven million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2015, Legal & General's operating profit (on the IFRS basis) was £1,455m and adjusted earnings per share were 18.58p for the period, an increase of 14% and 11% respectively.
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/
Legal & General Group plc is being advised on the transaction by Fenchurch.
Forward-looking statements
This announcement may contain certain forward-looking statements relating to Legal & General, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this announcement or any other forward-looking statement it may make.
