Britain’s biggest high street lender is in advanced talks about its biggest corporate acquisition since it was returned to full private ownership four years ago.
Sky News has learnt that Lloyds Banking Group is close to finalising a £400m takeover of Embark Group, a privately owned provider of savings and retirement products.
City sources said this weekend that an announcement could come as soon as this month.
News of the prospective deal comes just days after Antonio Horta-Osorio stepped down
If completed, the deal will rank among Lloyds’ most significant since it had to be bailed out by UK taxpayers with a £20bn capital injection in 2008.
The takeover of Embark will crystallise payouts for some of the world’s largest asset managers, including BlackRock, Franklin Templeton and Legg Mason, all of which hold minority stakes in the company.
Embark was established in 2012 by Phil Smith, who remains its chief executive and a substantial shareholder.
The company, which calls itself the UK’s fastest-growing digital retirement group, has more than £38bn under administration and close to 500,000 customers across the country.
It has grown through a string of major acquisitions, including that of Zurich’s investment and retail platform last year.
Embark offers a range of retirement and savings products under brands such as The Adviser Centre, Rowanmoor and Vested, as well as that of the parent company.
It also provides white-label services for the likes of BestInvest, Charles Stanley, Coutts and Moneyfarm.
The company employs more than 600 people at locations across Britain, including Edinburgh, London and Leeds.
It competes with the likes of AJ Bell and Pensionbee, which made its London stock market debut just weeks ago.
For Lloyds, the takeover of Embark will represent a continuation of its strategy to expand in areas of financial services where it does not already have a market-leading position, such as wealth management and insurance.
One insider said the Embark deal would plug a gap in Lloyds’ retail investment proposition and 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.
News of the prospective transaction comes just days after Antonio Horta-Osorio stepped down as Lloyds’ chief executive after more than a decade at the helm.
The bank’s £1.9bn takeover of MBNA, the credit card group, announced in 2016, was the largest takeover during his stint at the helm.
Mr Horta-Osorio’s successor, the HSBC executive Charlie Nunn, will arrive at Lloyds in August.
The company is being run in the meantime by William Chalmers, its finance chief.
Embark is being advised on the talks with Lloyds by Fenchurch Advisory Partners.
Lloyds declined to comment on Saturday, while Embark did not respond to a request for comment.