Aegon has announced the acquisition of Cofunds from Legal & General for GBP 140 million (EUR 164 million).
This transaction has enabled Aegon to become a leading provider in the retail platform market and this acquisition has firmly established the company, according to a press release in the company website.
The transaction will most likely go through by the end of 2016, which will be subject to customary regulatory approval, and integration of the business is expected to be completed by 2018.
“I am delighted that we are able to announce the acquisition of Cofunds,” said Alex Wynaendts, CEO of Aegon.
“This transaction builds on the successful repositioning of our business in the UK and the strong relationship we have built with Legal & General. By executing on our strategy, we have transformed our business into a cost efficient, scalable platform business,” he added.
Aegon is expecting to amass GBP 60 million of annualized cost synergies by transforming the Cofunds business onto the state-of-the-art Aegon technology, and, also by delivering efficiencies as a result of removing duplication across all businesses.
One-time expenditure incurred to achieve the cost synergies, and to ensure a smooth transition for customers and advisers, is estimated to be GBP 80 million. These expenses will be recorded in 2016 and 2017. Due to the cost synergies and identified opportunities for growth, the acquisition of Cofunds is expected to contribute to achieving the group’s return on equity target.
Cofunds was one of the first platforms to be launched in the United Kingdom, and is a name to be reckoned with in the retail platform space with over 750,000 customers.