Aegon has agreed to sell its UK insurance arm to Standard Life for $2.7bn, marking the completion of its strategic review of the business.

The transaction supports Aegon’s ambition to focus on its core US life insurance and retirement operations, where it owns Transamerica.

For Standard Life, the acquisition will significantly expand its footprint in the UK pensions and savings market. The combined business is expected to serve around 16 million customers and manage approximately £480bn (around $600bn) in assets under administration.

Lard Friese said: “The transaction represents an important step in our ambition to become a leading US life insurance and retirement group. The terms reflect our commitment to creating value for shareholders, and through our shareholding we will benefit from further value creation in the combined business. Standard Life is the right owner for Aegon UK and a good home for our employees: we share the same values and a strong commitment to customers, and together the businesses will create the UK’s largest retirement savings and income provider. Aegon’s asset management business in the UK will remain an important asset management partner to the new combined business.”

Andy Briggs added: “With financial wellbeing at the heart of everything it does, Aegon UK’s values and culture are aligned with our own. Together, we will not only be stronger, we will be better – helping our customers achieve better outcomes and greater financial security in later life. I look forward to welcoming everyone in Aegon UK to Standard Life in due course and working together to capture the huge potential in front of us.”

The deal is set to create one of the UK’s largest retirement savings and income providers, reflecting ongoing consolidation in the pensions and life insurance sector as firms scale to meet growing demand for retirement solutions and long-term savings products.