Bank bid likely
Lloyds in £400m takeover talks with Embark
A tie-up would be the bank’s biggest deal for four years
Lloyds Banking Group is in talks to acquire Embark Group, a privately owned provider of savings and retirement products with major centres in Dundee and Edinburgh.
City sources said discussions over a £400 million deal are at an advanced stage.
It would represent the biggest corporate acquisition by Lloyds since it was returned to full private ownership four years ago.
Embark was established in 2012 and has grown through a string of major acquisitions, including Zurich’s investment and retail platform last year.
In October 2019 Embark Group agreed to acquire the advised and partnership client books of Alliance Trust Savings (ATS) from interactive investor (II), for an undisclosed amount, further increasing Embark’s presence in the UK investment savings sector.
The transaction brought more than £6bn of assets under administration along with 30,000 new clients to Embark, taking the total scale of the Embark Group to over £22bn AuA on behalf of over 180,000 consumer clients.
The deal included the purchase of the Alliance Trust Savings building in Dundee, which became Embark’s platform operation centre, with platform service partner FNZ also occupying space in the building.
Some of the world’s largest asset managers, such as BlackRock, Franklin Templeton and Legg Mason, hold minority stakes in Embark which considers itself the UK’s fastest-growing digital retirement group. It has more than £38bn under administration and close to 500,000 customers across the country.
Embark is being advised on the talks with Lloyds by Fenchurch Advisory Partners, according to Sky News.
Lloyds would see the takeover of Embark as a further opportunity to expand in areas of financial services where it does not already have a market-leading position, such as wealth management and insurance.
It would open up a more effective IFA distribution channel for Scottish Widows mutual fund products.
Lloyds currently oversees about £170bn of assets through the division which includes Scottish Widows, Halifax Sharedealing and the Schroders Personal Wealth joint venture it established in 2018 following the withdrawal of a big mandate from Standard Life Aberdeen.
The talks with Embark come just days after Antonio Horta-Osorio stepped down as Lloyds’ chief executive. His biggest deal at Lloyds was the £1.9bn takeover of credit card group MBNA in 2016.