Lloyds Banking Group has agreed to acquire UK investment and retirement platform business Embark Group for £390m.
The deal comes after Portfolio Adviser sister title International Adviser reported on the speculation surrounding the acquisition in May 2021.
According to a London Stock Exchange statement on 29 July, the M&A deal will see Lloyds acquire £35bn of assets under administration on behalf of around 410,000 retail investor clients.
The transaction does not include the Rowanmoor Sipp and Ssas administration business, which is being retained by existing shareholders, and will become an independent business. This represents around £5bn out of over £40bn assets under administration.
Jackie Leiper, managing director for pensions, stockbroking and distribution at Scottish Widows, will become chief executive of Embark at completion.
Subject to regulatory approvals, the acquisition is expected to complete in the fourth quarter of 2021.
Ambitions to address mass market
The bank wants the M&A deal to “address the attractive mass market and self-directed wealth segment”, complementing its existing advice offerings through Schroders Personal Wealth and Cazenove Capital.
It is “targeting a top-three position in direct-to-consumer self-directed and robo-advice business in the medium term”, as well as “a top-three position in the individual pensions and retirement drawdown market by 2025”.
The bank will provide further investment and support to accelerate Embark’s proposition and service innovations for the intermediary sector.
Lloyds’ subsidiary Scottish Widows said the deal will “enhance its long-term savings proposition for intermediaries”.
‘Increase reach’
Antonio Lorenzo (pictured), chief executive of Scottish Widows and group director of insurance and wealth at Lloyds Banking Group, said: “There’s an ever-growing customer demand for clear, simple and affordable financial planning and retirement products and services.
“Our acquisition of Embark will not only help us serve all of a customer’s financial needs in one place, but also sit alongside our existing partnerships which meet the more complex financial planning and investment requirements of mass affluent and high net worth customers through Schroders Personal Wealth and Cazenove.
“Through Embark’s technology, we will be able to increase the reach of our investment offerings for customers who are happy to manage their own portfolios, through modern, easy to use technology.
“We’ll also be able to enhance our intermediary proposition, strengthen our offering in retirement and modernise the way Scottish Widows works with advisers, recognising the continued value of advice.”
David Barral, chairman of Embark Group, added: “In eight short years, Embark has built one of the most respected and fastest growing digital retirement and savings businesses in the UK.
“The combination of Lloyds Banking Group’s financial strength and distribution reach, combined with the agility, digital capability, and expertise of Embark, will provide the perfect opportunity to create a market leading proposition for consumers, intermediaries, and strategic partners.”
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