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4: Resolution takeover battle

On 25 July, 2007 Resolution and UK life insurer Friends Provident
announced a merger that would value the combined entity at
around £8.6bn but was criticised for offering poor value for
shareholders. Resolution and Friends’ shareholders were due to
vote on the groups' planned merger at an extraordinary general
meeting on 5 November.

Standard Life teamed up with a major global reinsurer Swiss Re, to
devise a deal which would see a cash and share bid for
Resolution, which would break up the business and offer a more
attractive alternative to Resolution shareholders than the proposed
merger with Friends Provident.

Crombie commented that:

“any acquisition had to offer one or more of:

• a potentially valuable customer base
• tangible scale benefits through operational
synergies
• product infill
• an extension to our distribution reach

Resolution ticked all of those boxes, but we were
determined not to pursue it at any price.”

Standard Life planned to take over Resolution's leading protection
offering, gain access to Abbey’s nationwide network of more than
700 branches (providing access to a further two million potential
customers) and acquire Resolution Asset Management, bringing
an additional £50bn assets under management onto its own
platform.

Standard Life's bid was seen as a surprising move by market
commentators as the company had thus far focussed primarily on
organic growth. The deal would create one of the largest pension
and life assurance firms in the UK, with more than seven million
U.K. customers. Following the transactions, Standard Life would
have enhanced scale in its leading asset management business
with combined funds under management of approximately £191bn.