On 7 May, Standard Life Aberdeen announced that Lloyds and its subsidiaries, including Scottish Widows, do not have a legal right to terminate a £109bn ($148bn, €124bn) long-term asset management agreement.
Scottish Widows cancelled the agreement in February, due to the merger of Aberdeen Asset Management and Standard Life creating “a material competitor”, according to Scottish Widows chief executive Antonio Lorenzo.
However, Standard Life disagrees that it is a material competitor and now plans to legally challenge Scottish Widows’ right to terminate the deal.
Scottish Widows responds
A Scottish Widows spokesperson has now responded to this challenge, telling Portfolio Adviser sister publication International Adviser they are disappointed by the comments made by Standard Life Aberdeen, “particularly in the light of our position as a major customer”.
The £109bn contract accounted for 17% of Standard Life Aberdeen’s total £646bn of assets under management (AUM). It also accounted for 4.4% of Standard Life Aberdeen’s revenue for the full year 2017.
The spokesperson said: “Standard Life Aberdeen is a clear and material competitor of Scottish Widows and Lloyds Banking Group in the UK and to suggest otherwise is not credible.
“As a result, Scottish Widows and Lloyds Banking Group had the right to terminate the contracts with Standard Life Aberdeen and we acted accordingly by serving notice on February 14.”
They said even if Scottish Widows had not cancelled the agreement, the management of the funds in question would have ended formally under the terms of the contracts in March 2022.
“We are confident of our legal position and that our actions are in the best interests of our customers, and we are therefore surprised at the course of action pursued by Standard Life Aberdeen,” the spokesperson said.
