26th Oct 2007 11:33
Standard Life plc26 October 2007 Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of that jurisdiction Date: 26 October 2007 STANDARD LIFE ANNOUNCES RECOMMENDED OFFER FOR RESOLUTION AND ASSOCIATED DISPOSAL OF CERTAIN RESOLUTION ASSETS TO SWISS RE Part I of II The Boards of Standard Life plc ("Standard Life") and Resolution plc("Resolution") are pleased to announce the terms of a recommended offer byStandard Life for Resolution (the "Offer" or the "Acquisition") and theassociated disposal of certain Resolution assets to Swiss Reinsurance Company("Swiss Re") (the "Disposal") (together the "Transactions"). • For each Resolution Share, Resolution Shareholders will receive: 517 pence in cash and 0.715 New Standard Life Shares. • The Offer will include a Mix and Match Facility and a Loan Note Alternative. • The Offer values each Resolution share at 715 pence, based on Standard Life's Closing Price of 276.25 pence on 25 October 2007 and 727 pence per Resolution share based on Standard Life's 3 month average share price of 293.69 pence. On the basis of the Closing Price on 25 October 2007, the Offer values Resolution at £4.9 billion, equivalent to 1.13x Embedded Value as at 30 June 2007. • Associated disposal of certain Resolution assets to Swiss Re for £2.35 billion in cash following exercise of options granted over such assets under an option agreement between Standard Life and Swiss Re. • The Offer consists of 72% cash, 28% New Standard Life Shares. Highlights • Following the Transactions, Standard Life will: - be one of the UK's leading life and pensions companies with approximately 7 million UK customers and have the largest UK new business franchise capability with combined 2006 PVNBP of £8.6 billion and combined embedded value as at 30 June 2007 of £6.6 billion; - have enhanced scale in its leading asset management business with combined funds under management of approximately £191 billion, including £24 billion under a long term contract from Swiss Re, and third party business increasing from 33% to 39% of funds under management; - have a complete product offering, with strength in pensions, protection, an enhanced annuity position as well as continued leadership in SIPP and Wrap; - be able to access up to £0.45 billion(1) per annum of additional vesting pensions, a source of profitable annuities; - deliver pre-tax cost synergies of at least £53 million per annum by the end of 2010, and financial synergies of £18 million per annum before tax. 15% of the cost and financial synergies are expected to be achieved in 2008, 75% in 2009 and 100% in 2010; - through the Abbey bancassurance relationship, gain access to a further 2 million potential customers through their nationwide network of more than 700 branches; - drive operational efficiency through combining asset management platforms, head offices and Life & Pensions support functions while maintaining market leading service capabilities; and - deliver an enhanced cashflow profile for the Enlarged Group, which will provide further opportunity to drive growth. Financial effects(2) The Board of Standard Life believes that the Transactions will deliver a numberof compelling financial benefits: • Operating EEV earnings per share neutral in 2008 and accretive from 2009, the first full year of ownership; • Return on Embedded Value neutral in 2008 and accretive from 2009; • Operating cashflow per share accretive from 2008; and • Higher margins in Life & Pensions and Asset Management. Resolution assets to be acquired by Standard Life Following the Transactions, Standard Life will retain Resolution businesses andassets including Resolution Asset Management, Scottish Provident, ScottishMutual Assurance, Phoenix Life Assurance, Scottish Mutual International andScottish Provident International. Standard Life will retain almost all of Resolution's new business capabilitywhich for the first half of 2007 generated: • PVNBP of £448 million; and • NBC of £30 million. Standard Life will acquire EEV of approximately £2.0 billion. Sale of assets to Swiss Re Standard Life has entered into an option agreement with Swiss Re pursuant towhich, subject to the Scheme becoming Effective, Swiss Re would (followingexercise of the options granted under that agreement) acquire certain ofResolution's businesses and assets including Phoenix Life, Phoenix Pensions,Phoenix & London Assurance and Resolution Management Services, for a purchaseprice of £2.35 billion payable in cash. As Standard Life will own Resolution Asset Management, Swiss Re has agreed tocontinue existing investment management arrangements with Standard Life for 10years, pursuant to which Standard Life will manage £24 billion of assets. Gerry Grimstone, Chairman of Standard Life, said: "We are delighted to announce this recommended offer for Resolution, which willcreate significant value for both Standard Life and Resolution shareholders. Thecombination of Standard Life's and Resolution's complementary businesses willcreate one of Britain's leading life & pensions and asset management groups andaccelerate Standard Life's delivery of shareholder value. We are also verypleased to be working with Swiss Re in this transaction, whose agreement toacquire a substantial proportion of Resolution's closed book assets for cashadds significant certainty for Resolution shareholders." Sandy Crombie, CEO of Standard Life, said: "Standard Life has had an extremely successful start to life as a public companysince our IPO last year. We are on course to deliver on our financial targetsand have delivered significant growth in assets, embedded value, new businessprofits and cashflow. This recommended offer for Resolution is the next step. Itwill significantly expand our UK operations and complete our retail productoffering to ensure we can meet the investment, savings, protection and pensionneeds of our significantly expanded customer base. We are looking forward toworking with our new colleagues to capitalise on the many opportunities thisbrings us." Clive Cowdery, Chairman of Resolution, said: "We believe this Transaction represents an attractive balance for Resolutionshareholders, who will receive a substantial proportion of their investment incash while retaining an equity interest in the value expected to be deliveredfrom the Enlarged Group. The board of Resolution, therefore, unanimouslyrecommends Standard Life's offer." There will be an analyst presentation for research analysts and investors at2pm (BST) today, 26 October 2007 to be held at UBS, 100 Liverpool Street,London, EC2M 2RH. The presentation will be webcast with dial in and playback facility. For detailsplease contact Maitland on +44 20 7379 5151. A copy of the presentation will be available at www.standardlife.com in duecourse. Enquiries: Standard Life plc Resolution plc +44 (0) 131 225 2552 +44 (0) 20 7489 4880 Gerry Grimstone Clive Cowdery Sandy Crombie Mike Biggs David Nish Steve Riley Merrill Lynch International Citi +44 (0) 20 7628 1000 +44 (0) 20 7986 4000 Henrietta Baldock Chris Jillings Matthew Greenburgh Andrew Thompson Michael Findlay UBS Investment Bank Lazard +44 (0) 20 7567 8000 +44 (0) 20 7187 2000 Ian Gladman Jon Hack Tim Waddell Edmund Dilger Maitland Temple Bar +44 (0) 20 7379 5151 +44 (0) 20 7002 1080 Neil Bennett +44 (0) 7795 425 580 Anthony Silverman Alex Child-Villiers Rebecca Mitchell Notes: (1) An estimated 50% of approximately £0.9 billion of vesting pensions per annum. (2) Nothing in this announcement should be interpreted to mean that Standard Life's future EEV operating earnings per share will necessarily match or exceed the historical EEV operating earnings per share of Standard Life. This summary should be read in conjunction with the full text of the followingannouncement and the Appendices. The conditions to, and certain further termsof, the Offer are set out in Appendix I. The bases and sources for certainfinancial information contained in this announcement are set out in Appendix II.Certain definitions and terms used in this announcement are set out in AppendixIII. Merrill Lynch is acting as joint financial adviser and corporate broker toStandard Life and no one else in connection with the Transactions and will notbe responsible to any other person for providing the protections afforded to theclients of Merrill Lynch nor for providing advice in relation to theTransactions or any other matter referred to in this announcement. UBS is acting as joint financial adviser and corporate broker to Standard Lifeand no one else in connection with the Transactions and will not be responsibleto any other person for providing the protections afforded to the clients of UBSnor for providing advice in relation to the Transactions or any other matterreferred to in this announcement. Citi is acting as joint financial adviser to Resolution and no one else inconnection with the Offer and will not be responsible to any other person forproviding the protections afforded to the clients of Citi nor for providingadvice in relation to the Offer or any other matter referred to in thisannouncement. Lazard is acting as joint financial adviser to Resolution and no one else inconnection with the Offer and will not be responsible to any other person forproviding the protections afforded to the clients of Lazard nor for providingadvice in relation to the Offer or any other matter referred to in thisannouncement. Overseas jurisdictions The release, publication or distribution of this announcement in jurisdictionsother than the United Kingdom may be restricted by law and, therefore, anypersons who are subject to the laws of any jurisdiction other than the UnitedKingdom should inform themselves about, and observe, any applicablerequirements. This announcement has been prepared for the purposes of complyingwith English law, the City Code and the Listing Rules and the informationdisclosed may not be the same as that which would have been disclosed if thisannouncement had been prepared in accordance with the laws and regulations ofany jurisdiction outside of England. This announcement is not intended to, and does not constitute, or form part of,an offer to sell, purchase, exchange or subscribe for or a solicitation of anoffer to sell, purchase or exchange any securities or a solicitation of any voteor approval in any jurisdiction. This announcement does not constitute aprospectus or a prospectus equivalent document. Shareholders of Standard Lifeand Resolution are advised to read carefully the formal documentation inrelation to the Offer once it has been despatched. The proposals relating to theOffer will be made solely through the Scheme Document, which will contain thefull terms and conditions of the Offer, including details of how to vote withrespect to the Scheme. Any acceptance or other response to the proposals shouldbe made only on the basis of the information in the Scheme Document. In particular, this announcement is not an offer of securities for sale or asolicitation of any offer to buy securities in the United States and the NewStandard Life Shares, which will be issued in connection with the Offer, havenot been, and will not be, registered under the US Securities Act or under thesecurities law of any state, district or other jurisdiction of the UnitedStates, Australia, Canada or Japan and no regulatory clearance in respect of theNew Standard Life Shares has been, or will be, applied for in any jurisdictionother than the UK. The New Standard Life Shares may not be offered, sold, or,delivered, directly or indirectly, in, into or from the United States withoutregistration under the US Securities Act or an exemption from registration. TheNew Standard Life Shares may not be offered, sold, resold, delivered ordistributed, directly or indirectly, in, into or from Canada, Australia or Japanor to, or for the account or benefit of, any resident of Australia, Canada orJapan absent an exemption from registration or an exemption under relevantsecurities law. It is expected that the New Standard Life Shares will be issuedin reliance upon the exemption from the registration requirements of the USSecurities Act provided by Section 3(a)(10) thereof. Under applicable USsecurities laws, persons (whether or not US Persons) who are or will be"affiliates" within the meaning of the US Securities Act of Standard Life orResolution prior to, or of the Enlarged Group after, the Effective Date will besubject to certain transfer restrictions relating to the New Standard LifeShares received in connection with the Scheme. The availability of the New Standard Life Shares, the Mix and Match Facility andthe Loan Note Alternative under the terms of the Offer to persons who are notresident in the United Kingdom may be affected by the laws of the relevantjurisdictions in which they are located. Persons who are not resident in theUnited Kingdom should inform themselves of, and observe, any applicablerequirements. The Loan Notes to be issued pursuant to the Loan Note Alternative have not been,and will not be, listed on any stock exchange. Notice to US Investors: The Offer relates to the shares of a UK company and isproposed to be made by means of a scheme of arrangement provided for under thelaws of England and Wales. The Offer is subject to the disclosure requirementsand practices applicable in the United Kingdom to schemes of arrangement, whichdiffer from the disclosure and other requirements of US securities laws.Financial information included in the relevant documentation will have beenprepared in accordance with accounting standards applicable in the UnitedKingdom that may not be comparable to the financial statements of US companies. If the Acquisition is implemented by way of an offer, it will be made inaccordance with the procedural and filing requirements of the US securitieslaws, to the extent applicable. If the Acquisition is implemented by way of anoffer, the New Standard Life Shares to be issued in connection with such offerwill not be registered under the US Securities Act or under the securities lawsof any state, district or other jurisdiction of the United States and may not beoffered, sold or delivered, directly or indirectly, in the United States exceptpursuant to an applicable exemption from, or in a transaction not subject to,the registration requirements of the US Securities Act or such other securitieslaws. Standard Life does not intend to register any such New Standard LifeShares or part thereof in the United States or to conduct a public offering ofthe New Standard Life Shares in the United States. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1 per cent. or more of any class of"relevant securities" of Standard Life or Resolution, all "dealings" in any"relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 p.m. (London time) on the Londonbusiness day following the date of the relevant transaction. This requirementwill continue until the Scheme becomes Effective, lapses or is otherwisewithdrawn or on which the "offer period" otherwise ends (or if the Acquisitionis implemented by way of an offer, until the date on which such offer becomes,or is declared, unconditional as to acceptances, lapses or is otherwisewithdrawn or on which the "offer period" otherwise ends). If two or more personsact together pursuant to an agreement or understanding, whether formal orinformal, to acquire an "interest" in "relevant securities" of Standard Life orResolution, they will be deemed to be a single person for the purpose of Rule8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Resolution or Standard Life by Standard Life or Resolution, or byany of their respective "associates", must be disclosed by no later than 12.00noon (London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. Forward looking statements This announcement may contain forward looking statements that are based oncurrent expectations or beliefs, as well as assumptions about future events.Generally, the words "will", "may", "should", "continue", "believes", "expects","intends", "anticipates" or similar expressions identify forward-lookingstatements. These statements are based on the current expectations of managementand are naturally subject to risks, uncertainties and changes in circumstances.Undue reliance should not be placed on any such statements because, by theirvery nature, they are subject to known and unknown risks and uncertainties andcan be affected by other factors that could cause actual results, andmanagement's plans and objectives, to differ materially from those expressed orimplied in the forward looking statements. There are several factors which could cause actual results to differ materiallyfrom those expressed or implied in forward looking statements. Among the factorsthat could cause actual results to differ materially from those described in theforward looking statements are the ability to combine successfully thebusinesses of Standard Life and Resolution and to realise expected synergiesfrom that combination, changes in the global, political, economic, business,competitive, market and regulatory forces, future exchange and interest rates,changes in tax rates and future business combinations or dispositions. Neither Standard Life nor Resolution undertakes any obligation (except asrequired by the Listing Rules, the Disclosure and Transparency Rules and therules of the London Stock Exchange) to revise or update any forward lookingstatement contained in this announcement, regardless of whether that statementis affected as a result of new information, future events or otherwise. Responsibility for information Save in relation to information relating specifically and solely to Resolution,the Resolution directors are not responsible for the contents of thisAnnouncement. Not for release, publication or distribution, in whole or in part, in or into any jurisdiction where to do so would constitute a violation of the relevant laws of that jurisdiction Date: 26 October 2007 STANDARD LIFE ANNOUNCES RECOMMENDED OFFER FOR RESOLUTION AND ASSOCIATED DISPOSAL OF CERTAIN RESOLUTION ASSETS TO SWISS RE Part II of II ACQUISITION OF RESOLUTION BY STANDARD LIFE 1. Introduction The Boards of Standard Life plc ("Standard Life") and Resolution plc("Resolution") are pleased to announce the terms of a recommended offer byStandard Life for Resolution (the "Offer" or the "Acquisition") and theassociated disposal of certain Resolution assets to Swiss Reinsurance Company("Swiss Re") (the "Disposal") (together the "Transactions"). It is currently envisaged that the Acquisition will be implemented by way of acourt sanctioned scheme of arrangement of Resolution. The Conditions to theOffer are set out in full in Appendix I to this announcement. In addition,attention is drawn to the summary of certain Conditions set out in paragraph 13of this Part II of the announcement. Following discussion with Standard Life, Resolution has, subject to thesatisfaction of certain conditions, agreed to take the steps necessary toeffect, to the extent that it is lawfully able to do so before the Schemebecomes Effective, certain reorganisation steps in relation to its group.Resolution intends, subject to its obligations under the merger agreement withFriends Provident plc ("Friends Provident") and the fiduciary duties of itsdirectors, to co-operate fully with Standard Life (including by providingreasonable access to Resolution's personnel and relevant information) in respectof the other pre-closing arrangements necessary for Standard Life to effect areorganisation of the Resolution Group immediately upon the Scheme becomingEffective. Standard Life has entered into an option agreement with Swiss Re (the "Swiss ReOption Agreement") pursuant to which, subject to the Scheme becoming Effective,Swiss Re would (following exercise of options granted over such assets undersuch option agreement) acquire certain of Resolution's businesses and assetsincluding Phoenix Life, Phoenix Pensions, Phoenix & London Assurance andResolution Management Services, for a purchase price of £2.35 billion payable incash. As Standard Life will own Resolution Asset Management, Swiss Re has agreed tocontinue existing investment management arrangements with Standard Life for 10years, pursuant to which Standard Life will manage £24 billion of assets. 2. Offer Terms For each Resolution Share, Resolution Shareholders will receive: 517 pence in cash and 0.715 New Standard Life Shares. The Offer values each Resolution share at 715 pence based on Standard Life'sClosing Price of 276.25 pence on 25 October 2007 and 727 pence per Resolutionshare based on Standard Life's 3 month average share price of 293.69 pence. Onthe basis of the Closing Price on 25 October 2007, the Offer values Resolutionat £4.9 billion. The Offer is subject to the conditions set out in Appendix I to thisannouncement and to the further terms and conditions to be set out in the SchemeDocument. 3. Resolution Board recommendation The Resolution directors, who have been so advised by Citi and Lazard, considerthe terms of the Acquisition to be fair and reasonable. In providing theiradvice to the Resolution directors, Citi and Lazard have taken into account thecommercial assessments of the Resolution directors. The Resolution directors consider that the Acquisition is in the best interestsof Resolution Shareholders as a whole and accordingly have unanimously agreed torecommend that Resolution Shareholders vote in favour of the resolutionsrelating to the Acquisition to be proposed at the Court Meeting and Resolution'sExtraordinary General Meeting. 4. Background to and reasons for the Acquisition The Board of Standard Life believes that the Acquisition offers a significantopportunity to create value. Since its demutualisation and IPO in 2006, Standard Life has continued to pursuea clear strategy to deliver shareholder value, based on: • creating capital efficient innovative products; • opening new routes to market; • leveraging investment management expertise and performance; and • driving for operational excellence. The Acquisition builds on this strategy. Following the Transactions, StandardLife will: • be one of the UK's leading life and pensions companies with approximately 7 million UK customers and have the largest UK new business franchise capability with combined 2006 PVNBP of £8.6 billion and combined embedded value as at 30 June 2007 of £6.6 billion; • have enhanced scale in its leading asset management business with combined funds under management of approximately £191 billion, including £24 billion under a long term contract from Swiss Re, and third party business increasing from 33% to 39% of funds under management; • have a complete product offering, with strength in pensions, protection, an enhanced annuity position as well as continued leadership in SIPP and Wrap; and • be able to access up to £0.45 billion(3) per annum of additional vesting pensions, a source of profitable annuities. The Enlarged Group will create significant value through cost synergies andimproved efficiency. Total pre-tax cost and financial synergies are expected tobe at least £71 million per annum, with £35 million being realised from assetmanagement savings and £18 million through consolidating the group head officesand Life and Pensions head office and support functions. Financial synergies of£18 million per annum have been identified reflecting the enhanced value of newbusiness. 15% of the cost and financial synergies are expected to be achieved in2008, 75% in 2009 and 100% in 2010. In addition to these cost and financial synergies, Standard Life believes thatthe combination provides an opportunity to achieve revenue synergies fromleveraging Standard Life's sales and distribution network to increase sales ofResolution products and increased cross-selling opportunities for products suchas annuities and protection to an enlarged customer base. Furthermore, thecombined asset management business will have considerable potential to enhancerevenues through applying more innovative and active investment strategies. The enhanced cashflow profile of the Enlarged Group will provide furtheropportunity to deliver growth. 5. Resolution assets to be acquired by Standard Life Following the Transactions, Standard Life will retain the following Resolutionbusinesses and assets: • Resolution Asset Management. £50 billion of the assets under management out of the £57 billion managed by Resolution as at 30 June 2007 will be retained by Standard Life after the Disposal, including £24 billion under a 10 year investment management agreement with Swiss Re. • Almost all of Resolution's new business capability, including its leading protection offering and profitable annuity and drawdown new business opportunity. In addition, Standard Life will gain access to Abbey's nationwide network of more than 700 branches, which will provide access to a further 2 million potential customers and diversify and significantly enhance Standard Life's distribution capability. Standard Life will also retain Resolution's 65 strong Abbey broker consultant business. During the first half of 2007 Resolution's new business generated: - PVNBP of £448 million; and - NBC of £30 million. • Life Division North, which has a market share of 6% in the UK protection market and includes: - Scottish Provident (EEV of £0.6 billion); - Scottish Mutual Assurance (EEV of £0.8 billion); - Phoenix Life Assurance (EEV of £0.3 billion); and - Scottish Mutual International and Scottish Provident International (total EEV of £0.3 billion). • Group cash of £0.6 billion and external debt of £0.9 billion as at 30 June 2007. 6. Arrangements with Swiss Re Pursuant to the Swiss Re Option Agreement, subject to the Scheme becomingEffective, Swiss Re would (following exercise of the options contained in thatagreement) acquire from Standard Life certain Resolution businesses and assetsfor a purchase price of £2.35 billion. The businesses to be acquired include: • Life businesses, which are substantially closed to new business and which include: - Phoenix Life; - Phoenix Pensions; - Phoenix & London Assurance; and - Resolution Life Limited ("RLL") (following the Reorganisation). • Resolution Management Services (excluding RMS (Ireland) Holdings, RMS (Glasgow) Limited, Scottish Provident Limited and Scottish Provident Pension Trustees Limited) along with those staff wholly or mainly assigned to the businesses acquired by Swiss Re pursuant to the Disposal. Resolution Management Services staff wholly or mainly assigned to life and asset management businesses retained by Standard Life will be transferred to Standard Life in accordance with TUPE following the appropriate consultation process. Following exercise of options granted under the Swiss Re Option Agreement SwissRe has agreed to continue the existing investment management arrangements of thebusinesses it acquires for 10 years, pursuant to which Standard Life wouldmanage £24 billion of assets. Swiss Re would retain the investment managementrelating to some £7 billion of assets within the businesses it would acquire. Standard Life would also reinsure to Swiss Re approximately £1.3 billionnon-profit immediate and deferred annuity liabilities in the Resolution businessretained by Standard Life. Under the terms of the Swiss Re Option Agreement, Standard Life has agreed thatit will not immediately prior to the first of the Court Hearings waive anyCondition relating to the business, assets, liabilities, financial or tradingposition of Resolution without the prior consent of Swiss Re, such consent notto be unnecessarily withheld. In addition, if Standard Life is notified by SwissRe of an event in relation to the businesses to be acquired by Swiss Re and/orResolution Management Services which constitutes a breach of a Condition of sucha nature that the Panel would or could reasonably be expected to permit thatCondition to be invoked, Standard Life may either choose to terminate the SwissRe Option Agreement with Swiss Re or, alternatively, cooperate with Swiss Re toobtain the Panel's consent to permit that Condition to be invoked. Swiss Re isbeing advised by Credit Suisse in the context of the Disposal. 7. Financing The cash consideration payable by Standard Life under the terms of the offerwill be funded from the consideration payable by Swiss Re pursuant to theDisposal and new debt facilities entered into for the purposes of theAcquisition. Under the terms of its debt facilities, Standard Life has agreedthat it will not, without the consent of the agent, acting on the instructionsof the lenders, agree to amend, waive, revise, withdraw, treat as satisfied oragree or decide not to enforce in whole or in part any Condition or materialterm of the Offer which would, or is reasonably likely to, have a materialadverse effect on the interests of the lenders, unless required by law, the CityCode, the Panel or, if relevant, the Court. Merrill Lynch and UBS Limited confirm that they are satisfied that resources areavailable to Standard Life to satisfy full acceptance of the Offer. 8. Cost and financial synergies Standard Life has identified a number of areas of synergies from the integrationof the Resolution assets to be acquired by Standard Life. Standard Life's management has targeted at least £71 million in annualisedpre-tax cost and financial synergies by the end of 2010 arising primarily fromthe following areas: • £35 million annual cost savings from the integration of Resolution's asset management function onto Standard Life's platform; • £18 million annual cost savings from de-duplication of group head office costs and rationalisation of UK Life & Pensions head office and support functions arising from the integration of the life operations to be retained by Standard Life following the Disposal of certain assets to Swiss Re; and • financial synergies of £18 million per annum reflecting the enhanced value of new business. 15% of the cost and financial synergies are expected to be achieved in 2008, 75%in 2009 and 100% in 2010. The estimated pre-tax one-off costs of achieving thecost synergies are expected to be approximately £82 million, comprisingapproximately £65 million in 2008 and approximately £17 million in 2009. Management consider that these savings have been conservatively estimated andare confident that they will be delivered. An implementation plan is in place. Standard Life's head office will continue to be in Edinburgh and it intends tooperate certain group functions from London. Resolution's head office in Londonwill be retained as a corporate office of the Enlarged Group. It is expectedthat the Enlarged Group will be structured into a number of operationaldivisions. The UK Financial Services Business, which comprises Standard Life'slife and pensions, healthcare and banking divisions, will be extended to includeResolution's new business division and in-force business. Resolution andStandard Life's asset management operations will be integrated and managed as asingle entity. The above cost synergies have been determined after allowing for the fullimplementation of Standard Life and Resolution's previously announced costsavings programmes: • At the time of its IPO, Standard Life announced a Life & Pensions expense reduction of £30 million and corporate cost reduction of £16 million per annum by 2007. • Standard Life also announced £100 million of underlying annual cost savings in its preliminary results of 22 March 2007. • Resolution announced £17 million of pre-tax annual synergies at the time of its acquisition of the former Abbey life companies, which completed in August 2006. These synergies also exclude the £20 million of expected pre-tax annual costsavings relating to Resolution's merger with Britannic, which completed inSeptember 2005 and which relate to the businesses to be acquired by Swiss Re. In addition to the benefits outlined above, Standard Life's management believethat Standard Life would be able to realise financial benefits at leastequivalent to the anticipated £250 million benefit arising from the hithertoproposed merger of Resolution's Life Division North and Life Division South in2008 as announced by Resolution on 10 September 2007, through merging theacquired businesses into certain life funds in the Standard Life Group. 9. Financial effects of the Transactions The Board of Standard Life believes the Transactions have a number of compellingfinancial benefits. These are expected to be achieved through increased incomeas a result of the growth in funds under management by Standard Life Investmentsto approximately £191 billion (including the £24 billion under a long termcontract from Swiss Re) and the enhancement of Standard Life's new businessdistribution platform through the addition of the Abbey bancassurancerelationship and improvements in new business margins. The Board of Standard Life expects that the combined effect of these items willlead to(4): • operating EEV earnings per share neutral in 2008 and accretive from 2009, the first full year of ownership; • Return on Embedded Value neutral in 2008 and enhancing from 2009; • operating cashflow per share accretive from 2008; and • higher margins in Life & Pensions and Asset Management. 10. Board of Directors of the Enlarged Group Clive Cowdery, Mike Biggs and Sir David Cooksey have been invited to join theBoard of Standard Life on completion of the Acquisition. It is proposed thatClive Cowdery will join the Board as non-executive Deputy Chairman. 11. Dividend Policy and Capital The Enlarged Group will follow Standard Life's existing dividend policyfollowing completion of the Transactions. Standard Life's objective is to pay aprogressive dividend which takes account of the long term earnings and cash flowpotential of the Enlarged Group. Standard Life's interim dividend is paid in November and final dividend in Mayeach year. The interim dividend is expected to represent approximately one-thirdof the expected total annual dividend. It is intended that Resolution Shareholders who receive New Standard Life Shareswill be entitled to receive Standard Life's final dividend for the year ending31 December 2007. Resolution is a highly cash generative business, with shareholder cashflow of£201 million in the first half of 2007. Initially the additional cashflow whichResolution brings to the Enlarged Group will be used to pay down the debtfacility which Standard Life has arranged to fund in part the Acquisition.Standard Life will target a level of gearing which is consistent with an 'A/A1'credit rating and maintain an efficient balance sheet. 12. Current trading and prospects Standard Life has today released its New Business Results for the nine months to30 September 2007. The highlights are as follows: • Worldwide life and pensions sales up 21% to £11,669 million (2006: £9,690 million) • UK life and pensions sales up 27% to £9,850 million (2006: £7,777 million) - Individual SIPP sales up 43% to £3,577 million (2006: £2,506 million) - Group Pensions sales up 31% to £2,000 million (2006: £1,532 million) • Standard Life Investments worldwide investment net inflows up 95% to £6,078 million (2006: £3,121 million) - Third party funds under management up 24% to £47.7 billion (31 December 2006: £38.5 billion) - Total funds under management up 8% to £142.2 billion (31 December 2006: £132.1 billion) Standard Life's new business performance in the first nine months of 2007 hasbeen strong, with growth of 21% in worldwide life and pensions and a 95%increase in investment net inflows. The moderation in growth rate from that seenin recent quarters was due to lower levels of UK new business in the thirdquarter, reflecting the impact of seasonality, recent volatility in financialmarkets, competitor pricing activity, and a tougher 2006 Q3 comparator. Standard Life remains confident of achieving its previously announced margintargets and is on track to meet its target of a 9 - 10% return on embedded valuein 2007 and increasing thereafter. 13. Conditions Taking into account the particular circumstances of Resolution's business, theOffer is conditional, amongst other things, on the following Conditions, whichhave been negotiated and agreed between Standard Life, Resolution and Swiss Re: • the Financial Services Authority giving notice in writing of its (change of control) approval (or being treated as having given its approval, following the expiry of prescribed approval period) in respect of: - Standard Life acquiring Resolution regulated entities (in terms reasonably satisfactory to Standard Life); - Swiss Re acquiring Resolution regulated entities (in terms reasonably satisfactory to Swiss Re); and - the RLL Reorganisation (in terms reasonably satisfactory to Standard Life and Swiss Re); • the Office of Fair Trading ("OFT") indicating in terms satisfactory to Standard Life that it does not intend to refer the acquisition by Standard Life of Resolution for an in-depth review by the Competition Commission; • the European Commission approving Swiss Re's acquisition of the Resolution businesses (either unconditionally or on terms satisfactory to Swiss Re) without initiating an in-depth review, or, if the transaction is referred back to the UK for review by the OFT, the OFT indicating in terms satisfactory to Swiss Re that it does not intend to refer Swiss Re's acquisition of the Resolution businesses for an in-depth review by the Competition Commission; and • the Friends Provident Transaction not being approved by Resolution Shareholders. In the event that any of the Conditions referred to above are not satisfied,Standard Life will seek to lapse the Offer. 14. Management and Employees The Board of Standard Life believes that the prospects of employees of theEnlarged Group generally will be enhanced as a result of its strengthened marketposition and growth prospects. The Board of Standard Life has given assurances to the Resolution directorsthat, following completion of the acquisition, the existing contractualemployment rights of all employees of the retained Resolution businesses will befully safeguarded. Any process of harmonising employment terms and conditionswill be undertaken with the full involvement of recognised employeerepresentative bodies. Participants in the Resolution Share Schemes will be advised separately in duecourse of the impact of the merger on their entitlements and of the choicesavailable to them. 15. Information on Standard Life Standard Life is principally involved in managing customers' assets held in theform of life assurance and pensions, investment management, banking andhealthcare insurance products, and is a member of the FTSE 100 Index. The Standard Life Assurance Company was established in 1825, and wasreincorporated as a mutual assurance company in 1925. The Standard Life grouporiginally operated only through branches or agencies of the mutual company inthe United Kingdom and certain other countries. Its Canadian branch was foundedin 1833 and its Irish operations in 1838. In 1996, it opened a branch inFrankfurt, Germany. In the 1990s, the group also sought to diversify its operations into areas whichcomplemented its core life assurance and pensions business, with the intentionof positioning itself as a broad range financial services provider. In 1998 thegroup set up Standard Life Bank, its UK mortgage and retail savings bankingsubsidiary, and Standard Life Investments, which had previously been thein-house investment management unit of the group's life assurance and pensionsbusiness, was separated into a distinct legal entity, with the aim ofestablishing it as an independent investment management business providingservices to both the group and third party retail and institutional clients. The group's Hong Kong subsidiary, Standard Life Asia Limited, was incorporatedin 1999 as a joint venture and became a wholly-owned subsidiary of Standard Lifein 2002. The group's operations in Hong Kong were established to give the groupa presence in the Far East from which it could expand into China. The group'sjoint venture in China with Tianjin Economic Development Area General Companybecame operational in 2003. The group's joint ventures in India with HousingDevelopment Finance Corporation Limited were incorporated in 2000 (in relationto the life assurance and pensions joint venture) and 2003 (in relation to theinvestment management joint venture). On 31 May 2006, the voting members of The Standard Life Assurance Company votedin favour of the demutualisation of The Standard Life Assurance Company and theflotation of Standard Life on the London Stock Exchange, which took place on 10July 2006. Standard Life's head office is in Edinburgh, and has significant operations inCanada, Ireland, Germany Hong Kong, China and India. In the first half of 2007, Standard Life reported Worldwide life and pensionsPVNBP of £8,181 million, with UK life and pensions PVNBP of £6,954 million. EEVoperating profit for the first half of 2007 was £353 million. Group embeddedvalue was £5,911 million at 30 June 2007. 16. Information on Resolution Resolution is a specialist manager of in-force UK life funds and a member of theFTSE 100 Index. It was formed on 6 September 2005 when the merger of BritannicGroup and Resolution Life Group ("RLG") was completed. Britannic's heritage dates back to 1866, but it was only in 2003 that it closedfor new business to focus on acquiring closed life funds. Britannic acquired thelife operations of Allianz Cornhill in December 2004 and the Century Group inMarch 2005. RLG was formed for the purpose of buying and managing closed life funds. Itacquired the Royal & Sun Alliance life companies in September 2004 and SwissLife UK in March 2005. On 1 September 2006 Resolution completed the acquisition of the UK and offshorelife insurance businesses of Abbey together with the associated new businessinfrastructure and services companies. Resolution's head office is in London and it has significant administrationoperations in Wythall and Glasgow. Resolution's asset management operations arealso based in Glasgow. Resolution has total policyholder invested assets of £52 billion, comprising thefinancial assets and investment properties on the balance sheet at 30 June 2007.Total funds under management at that date including third party funds totalled£57 billion. Resolution's embedded value at 30 June 2007 was £4,340 million.Resolution's EEV profit before tax for the half year ended 30 June 2007 was £288million and reported IFRS profits before tax for the half year ended 30 June2007 were £127 million. Gross assets on an IFRS basis as at 30 June 2007 were£63,466 million. 17. Scheme The Scheme involves an application by Resolution to the Court to sanction theScheme and confirm the cancellation of the Resolution Shares which are thesubject of the Scheme other than Resolution Shares in respect of whichShareholders have elected to accept consideration in the form of Loan Notesunder the Loan Note Alternative (which shares will be transferred to StandardLife pursuant to the Scheme). Under the Scheme. Resolution Shareholders willreceive the New Standard Life Shares and cash (or Loan Notes) in considerationfor cancellation or, as the case may be, the transfer of the Resolution Shares. The Scheme requires the approval of Resolution Shareholders at the Court Meetingand approval by the Resolution Shareholders of certain resolutions to beproposed at the Resolution Extraordinary General Meeting. The Scheme would beapproved at the Court Meeting if a majority in number representing 75 per cent.in value of Resolution Shareholders present and voting, either in person or byproxy, vote in favour of the Scheme. The Resolution Extraordinary GeneralMeeting will be convened for the purposes of considering and, if thought fit,passing a special resolution to approve the reduction of Resolution's sharecapital and amendments to the articles of association of Resolution necessary toimplement the Scheme and any other resolutions that may be necessary. Once the necessary approvals from Resolution Shareholders have been obtained andthe other Conditions have been satisfied (or, where applicable, waived), theScheme would become Effective upon the sanction by the Court and theregistration of the final court order by the Registrar of Companies in Englandand Wales. Standard Life reserves the right (subject to the lending banks consent) toimplement the Acquisition by way of takeover offer pursuant to which StandardLife would make a contractual offer under the Code to Resolution Shareholders toacquire the entire issued and to be issued ordinary share capital of Resolution.Any such offer would be made on the basis that Resolution Shares would beacquired fully paid and free from all liens, charges, equitable interestsencumbrances and rights of pre-emption and other interest of any naturewhatsoever and together with all rights then attaching thereto. Fractional entitlements to New Standard Life Shares under the terms of the Offerwill be disregarded and will not be issued. 18. Irrevocable undertakings Resolution's directors are prevented from granting irrevocable undertakings toStandard Life in relation to the Offer due to the terms of the existingirrevocable undertakings they have given to Friends Provident. 19. Key terms of the Merger Agreement and Friends Provident Inducement Fee Resolution may be contractually prohibited from entering into a merger agreementwith Standard Life under the terms of Resolution's existing merger agreementwith Friends Provident. Standard Life has entered into a unilateral deed toregulate the basis on which it is willing to effect the Transaction inaccordance with which Standard Life has undertaken to behave in all respects inaccordance with the provisions of the Merger Agreement as if it had been enteredinto by both Standard Life and Resolution. If Resolution is permitted to anddoes not enter into the Merger Agreement within a specified period StandardLife's obligations under the deed shall terminate. The Merger Agreement includes provisions to implement the Scheme on a timelybasis and governing the conduct of the businesses of Resolution and StandardLife during the period prior to the Merger becoming Effective. The Merger Agreement provides that all remaining Conditions other than those inset out in paragraphs 1.3 and 3.4 of Appendix I shall be waived prior to theScheme Hearing, unless a Party seeks to invoke one of the Conditions and hasnotified the other and provided reasonable evidence that an event has occurredor circumstance has arisen which is sufficient for the Panel to permit the otherparty to withdraw from the merger. Standard Life has agreed that it shall be liable to pay the Friends ProvidentInducement Fee in the event that it becomes due and payable by Resolution inaccordance with the provisions of the Friends Provident Merger Agreement,unless: • a material corporate transaction involving Resolution is announced and completes; • the Board of Resolution do not unanimously and without qualification recommend that Resolution Shareholders vote in favour of the Resolution EGM Resolutions and approve the Scheme or, having made such a recommendation the Board of Resolution at any time withdraw, or adversely modify, or qualify such recommendation • the Resolution EGM Resolutions are not passed or the Scheme is not approved by Resolution Shareholders by the requisite majorities, and the Scheme is subsequently withdrawn and during the following 12 months period a material corporate transaction involving Resolution is announced and completes within a further 12 months, and in such circumstances the Friends Provident Inducement Fee shall be repaidto Standard Life. The Merger Agreement, if and when binding upon Resolution, includes anundertaking from Resolution not to agree to any inducement fee or any similararrangement with any third party prior to the termination of the MergerAgreement. The Merger Agreement includes undertakings from the Parties in terms that thatthey will not initiate or solicit any discussion for the purposes of procuringan Alternative Proposal. The Merger Agreement also contains obligations on theParties to notify each other of any approach regarding an Alternative Proposal,the material terms of any such approach and they have undertaken, subject to thedirectors' fiduciary duties, not to withdraw, modify or qualify theirrecommendation within 48 hours of such notification without the consent of theother party. Standard Life has reserved the right to elect to implement the merger by meansof a takeover offer, to be subject to a 50 per cent. acceptance condition and toremain open until day 60 under the City Code. The Merger Agreement shall terminate in certain circumstances including, withoutprejudice to the rights of either party that may have arisen prior totermination and without prejudice to the Inducement Fee, if: • the merger does not become Effective on or before the Long Stop Date 31 March 2008; • any Condition becomes incapable of satisfaction or is invoked; • an Alternative Proposal becomes or is declared wholly unconditional or • is completed; • the shareholder resolutions of either Party necessary to implement the Merger are not passed by the requisite majorities; or • following the Board of either Party withdrawing, adversely modifying or qualifying their recommendation. 20. Standard Life Extraordinary General Meeting Given the size of the proposed Transactions in relation to the current size ofStandard Life, it will be necessary for Standard Life Shareholders to approvethe Transactions and authorise an increase in the share capital of Standard Lifeand the allotment of the New Standard Life Shares. An extraordinary generalmeeting of Standard Life will be convened for this purpose. A circularcontaining the notice of Standard Life Extraordinary General Meeting will besent to Standard Life Shareholders. 21. Overseas Shareholders The availability of the New Standard Life Shares, the Mix and Match Facility andthe Loan Notes under the terms of the Offer to persons not resident in theUnited Kingdom may be affected by the laws of the relevant jurisdiction wherethey are resident. Such persons should inform themselves about and observe anyapplicable requirements. Further details in relation to overseas shareholderswill be contained in the Scheme Document. 22. Mix and Match Facility relating to the Offer A Mix and Match Facility will be made available to Resolution Shareholders inconnection with the Offer. Further information on the Mix and Match Facility will be included in the SchemeDocument. 23. The Loan Note Alternative As an alternative to some or all of the cash consideration to which they wouldotherwise be entitled under the Offer, accepting Resolution Shareholders (otherthan certain overseas shareholders who may not participate in the Loan NoteAlternative) will, subject to the conditions and further terms which will be setout in the Scheme Document, be entitled to elect to receive Loan Notes to beissued by Standard Life on a basis to be determined. 24. Settlement, listing and dealings Application will be made to the UK Listing Authority and the London StockExchange for the New Standard Life Shares to be admitted to the Official Listand to trading on the London Stock Exchange's main market for listed securities.It is expected that the listing of the New Standard Life Shares will becomeEffective and that dealings for normal settlement will commence at 8.00 a.m. onthe day following the Effective Date. Further details on settlement, listing anddealing will be included in the documents to be sent to Resolution Shareholders. 25. Delisting and re-registration It is intended that the London Stock Exchange and the UKLA will be requestedrespectively to cancel trading in Resolution Shares on the London StockExchange's main market for listed securities and the listing of the ResolutionShares from the Official List on the Effective Date. It is intended that Resolution be re-registered as a private limited company aspart of the Scheme and for this to take effect on the Effective Date. If the Acquisition is effected by way of a takeover offer, it is anticipatedthat the cancellation of Resolution's listing and admission to trading will takeeffect no earlier than 20 Business Days after the date on which the offerbecomes or is declared unconditional in all respects. Delisting wouldsignificantly reduce the liquidity and marketability of any Resolution Sharesnot assented to the offer at that time. If the Acquisition is effected by way of a takeover offer and such offer becomesor is declared unconditional in all respects and sufficient acceptances arereceived, Standard Life intends to exercise its rights to acquire compulsorilythe remaining Resolution Shares in respect of which the offer has not beenaccepted. 26. Interests in Resolution shares Save as disclosed in Appendix IV, neither Standard Life, nor any of itsdirectors, nor to the best of Standard Life's knowledge and belief, any personacting in concert with Standard Life is interested in or has any rights tosubscribe for any Resolution Shares or has borrowed or lent any ResolutionShares nor does any such person have any short position whether conditional orabsolute and whether in the money or otherwise (including a short position undera derivative) or any arrangement in relation to Resolution Shares. For thesepurposes "interest" includes any long economic exposure, whether conditional orabsolute, to changes in the price of securities and a person is treated ashaving an "interest" by virtue of the ownership or control of securities or byvirtue of any option in respect of, or derivative referenced to, securities and"arrangement" includes any agreement to sell or any delivery obligation or rightto require another person to purchase or take delivery of Resolution Shares andalso includes any indemnity or option arrangement, any agreement orunderstanding, formal or informal, of whatever nature relating to ResolutionShares which may be an inducement to deal or refrain from dealing in suchsecurities. 27. Securities in issue In accordance with Rule 2.10 of the City Code, as at close of business on 25October 2007, being the last Business Day prior to this announcement, StandardLife had 2,173,918,591 ordinary shares of 10 pence each in issue (ISIN numberGB00B16KPT44) and Resolution had 686,402,970 ordinary shares of 5 pence each inissue (ISIN number GB0004342563). 28. Expected timetable It is currently expected that shareholder documentation in relation to theAcquisition will be despatched in December 2007 with a Standard LifeExtraordinary General Meeting in January 2008 and completion in the firstquarter of 2008. Enquiries:Standard Life plc Resolution plc+44 (0) 131 225 2552 +44 (0) 20 7489 4880Gerry Grimstone Clive CowderySandy Crombie Mike BiggsDavid Nish Steve Riley Merrill Lynch International Citi+44 (0) 20 7628 1000 +44 (0) 20 7986 4000Henrietta Baldock Chris JillingsMatthew Greenburgh Andrew ThompsonMichael Findlay UBS Investment Bank Lazard+44 (0) 20 7567 8000 +44 (0) 20 7187 2000Ian Gladman Jon HackTim Waddell Edmund DilgerRobert Minear Maitland Temple Bar+44 (0) 20 7379 5151 +44 (0) 20 7002 1080Neil Bennett Alex Child-VilliersAnthony SilvermanRebecca Mitchell Notes: (3) An estimated 50% of approximately £0.9 billion of vesting pensions per annum. (4) Nothing in this announcement should be interpreted to mean that Standard Life's future EEV operating earnings per share will necessarily match or exceed the historical EEV operating earnings per share of Standard Life. The conditions to, and certain further terms of, the Offer are set out inAppendix I. The bases and sources for certain financial information contained inthis announcement are set out in Appendix II. Certain definitions and terms usedin this announcement are set out in Appendix III. Merrill Lynch is acting as joint financial adviser and corporate broker toStandard Life and no one else in connection with the Transactions and will notbe responsible to any other person for providing the protections afforded to theclients of Merrill Lynch nor for providing advice in relation to theTransactions or any other matter referred to in this announcement. UBS is acting as joint financial adviser and corporate broker to Standard Lifeand no one else in connection with the Transactions and will not be responsibleto any other person for providing the protections afforded to the clients of UBSnor for providing advice in relation to the Transactions or any other matterreferred to in this announcement. Citi is acting as joint financial adviser to Resolution and no one else inconnection with the Offer and will not be responsible to any other person forproviding the protections afforded to the clients of Citi nor for providingadvice in relation to the Offer or any other matter referred to in thisannouncement. Lazard is acting as joint financial adviser to Resolution and no one else inconnection with the Offer and will not be responsible to any other person forproviding the protections afforded to the clients of Lazard nor for providingadvice in relation to the Offer or any other matter referred to in thisannouncement. Overseas jurisdictions The release, publication or distribution of this announcement in jurisdictionsother than the United Kingdom may be restricted by law and therefore any personswho are subject to the laws of any jurisdiction other than the United Kingdomshould inform themselves about, and observe, any applicable requirements. Thisannouncement has been prepared for the purposes of complying with English law,the City Code and the Listing Rules and the information disclosed may not be thesame as that which would have been disclosed if this announcement had beenprepared in accordance with the laws and regulations of any jurisdiction outsideof England. This announcement is not intended to, and does not constitute, or form part of,an offer to sell, purchase, exchange or subscribe for or a solicitation of anoffer to sell, purchase or exchange any securities or a solicitation of any voteor approval in any jurisdiction. This announcement does not constitute aprospectus or a prospectus equivalent document. Shareholders of Standard Lifeand Resolution are advised to read carefully the formal documentation inrelation to the Offer once it has been despatched. The proposals relating to theOffer will be made solely through the Scheme Document, which will contain thefull terms and conditions of the Offer, including details of how to vote withrespect to the Scheme. Any acceptance or other response to the proposals shouldbe made only on the basis of the information in the Scheme Document. In particular, this announcement is not an offer of securities for sale or asolicitation of any offer to buy securities in the United States and the NewStandard Life Shares, which will be issued In connection with the Offer, havenot been, and will not be, registered under the US Securities Act or under thesecurities law of any state, district or other jurisdiction of the UnitedStates, Australia, Canada or Japan and no regulatory clearance in respect of theNew Standard Life Shares has been, or will be, applied for in any jurisdictionother than the UK. The New Standard Life Shares may not be offered, sold, or,delivered, directly or indirectly, in, into or from the United States withoutregistration under the US Securities Act or an exemption from registration. TheNew Standard Life Shares may not be offered, sold, resold, delivered ordistributed, directly or indirectly, in, into or from Canada, Australia or Japanor to, or for the account or benefit of, any resident of Australia, Canada orJapan absent an exemption from registration or an exemption under relevantsecurities law. It is expected that the New Standard Life Shares will be issuedin reliance upon the exemption from the registration requirements of the USSecurities Act provided by Section 3(a)(10) thereof. Under applicable USsecurities laws, persons (whether or not US Persons) who are or will be"affiliates" within the meaning of the US Securities Act of Standard Life orResolution prior to, or of the Enlarged Group after, the Effective Date will besubject to certain transfer restrictions relating to the New Standard LifeShares received in connection with the Scheme. The availability of the New Standard Life Shares, the Mix and Match Facility andthe Loan Note Alternative under the terms of the Offer to persons who are notresident in the United Kingdom may be affected by the laws of the relevantjurisdictions in which they are located. Persons who are not resident in theUnited Kingdom should inform themselves of, and observe, any applicablerequirements. The Loan Notes to be issued pursuant to the Loan Note Alternative have not been,and will not be, listed on any stock exchange. Notice to US Investors: The Offer relates to the shares of a UK company and isproposed to be made by means of a scheme of arrangement provided for under thelaws of England and Wales. The Offer is subject to the disclosure requirementsand practices applicable in the United Kingdom to schemes of arrangement, whichdiffer from the disclosure and other requirements of US securities laws.Financial information included in the relevant documentation will have beenprepared in accordance with accounting standards applicable in the UnitedKingdom that may not be comparable to the financial statements of US companies. If the Acquisition is implemented by way of an offer, it will be made inaccordance with the procedural and filing requirements of the US securitieslaws, to the extent applicable. If the Acquisition is implemented by way of anoffer, the New Standard Life Shares to be issued in connection with such offerwill not be registered under the US Securities Act or under the securities lawsof any state, district or other jurisdiction of the United States and may not beoffered, sold or delivered, directly or indirectly, in the United States exceptpursuant to an applicable exemption from, or in a transaction not subject to,the registration requirements of the US Securities Act or such other securitieslaws. Standard Life does not intend to register any such New Standard LifeShares or part thereof in the United States or to conduct a public offering ofthe New Standard Life Shares in the United States. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in 1 per cent. or more of any class of"relevant securities" of Standard Life or Resolution, all "dealings" in any"relevant securities" of that company (including by means of an option inrespect of, or a derivative referenced to, any such "relevant securities") mustbe publicly disclosed by no later than 3.30 p.m. (London time) on the Londonbusiness day following the date of the relevant transaction. This requirementwill continue until the Scheme becomes Effective, lapses or is otherwisewithdrawn or on which the "offer period" otherwise ends (or if the Acquisitionis implemented by way of an offer, until the date on which such offer becomes,or is declared, unconditional as to acceptances, lapses or is otherwisewithdrawn or on which the "offer period" otherwise ends). If two or more personsact together pursuant to an agreement or understanding, whether formal orinformal, to acquire an "interest" in "relevant securities" of Standard Life orResolution, they will be deemed to be a single person for the purpose of Rule8.3. Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Resolution or Standard Life by Standard Life or Resolution, or byany of their respective "associates", must be disclosed by no later than 12.00noon (London time) on the London business day following the date of the relevanttransaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk. "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8, you should consult the Panel. Forward looking statements This announcement may contain forward looking statements that are based oncurrent expectations or beliefs, as well as assumptions about future events.Generally, the words "will", "may", "should", "continue", "believes", "expects","intends", "anticipates" or similar expressions identify forward-lookingstatements. These statements are based on the current expectations of managementand are naturally subject to risks, uncertainties and changes in circumstances.Undue reliance should not be placed on any such statements because, by theirvery nature, they are subject to known and unknown risks and uncertainties andcan be affected by other factors that could cause actual results, andmanagement's plans and objectives, to differ materially from those expressed orimplied in the forward looking statements. There are several factors which could cause actual results to differ materiallyfrom those expressed or implied in forward looking statements. Among the factorsthat could cause actual results to differ materially from those described in theforward looking statements are the ability to combine successfully thebusinesses of Standard Life and Resolution and to realise expected synergiesfrom that combination, changes in the global, political, economic, business,competitive, market and regulatory forces, future exchange and interest rates,changes in tax rates and future business combinations or dispositions. Neither Standard Life nor Resolution undertakes any obligation (except asrequired by the Listing Rules, the Disclosure and Transparency Rules and therules of the London Stock Exchange) to revise or update any forward lookingstatement contained in this announcement, regardless of whether that statementis affected as a result of new information, future events or otherwise. Responsibility for information Save in relation to information relating specifically and solely to Resolution,the Resolution directors are not responsible for the contents of thisAnnouncement. APPENDIX I CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE ACQUISITION The Acquisition will be conditional upon the Scheme becoming unconditional andEffective by 31 March 2008 or such later date as Resolution and Standard Lifemay agree and (if required) the Court and the Panel may allow. 1. The Scheme will be subject to the following conditions: 1.1 approval by a majority in number representing not less thanthree-fourths in value of the holders of Scheme Shares, present and voting,whether in person or by proxy, at the Court Meeting (or any adjournment thereof)and such approval not subsequently being revoked; 1.2 the resolutions required to implement the Scheme being passed atthe Resolution Extraordinary General Meeting (or any adjournment thereof); and 1.3 the sanction of the Scheme and the confirmation of the CapitalReduction by the Court (in either case with or without modification (but subjectto such modification being acceptable to Standard Life and Resolution)), officecopies of the Court Order and of the minute of reduction being delivered to theRegistrar of Companies and, in relation to the Capital Reduction, beingregistered by him. 2 The Acquisition will be conditional upon the passing at theStandard Life Extraordinary General Meeting (or any adjournment thereof) of suchresolution or resolutions as are necessary to approve, implement and effect theTransactions and the acquisition of Resolution Shares pursuant to theAcquisition or otherwise (as such resolutions may be set out in the StandardLife Shareholder Circular, including a resolution or resolutions to increase theshare capital of Standard Life and authorise the creation and allotment of theNew Standard Life Shares) and such resolutions not subsequently being revoked. 3 Standard Life and Resolution have agreed that, subject tothe provisions of paragraph 5 of this Appendix I below and the requirements ofthe Panel in accordance with the City Code, the Scheme will also be conditionalupon, and accordingly the necessary actions to effect the Acquisition will onlybe taken on, the satisfaction, or where relevant, waiver of the followingConditions: 3.1 all merger control clearances and approvals from CompetitionAuthorities necessary for the purposes of the Acquisition being obtained interms reasonably satisfactory to Standard Life and all waiting or other timeperiods (including any extensions thereof) having expired, lapsed or terminated; 3.2 the Office of Fair Trading deciding, in terms satisfactory toStandard Life, not to refer the proposed acquisition envisaged in theAcquisition or any matter arising therefrom to the UK Competition Commission forinvestigation under the Enterprise Act 2002; 3.3 to the extent that the transactions contemplated by the Swiss ReTransaction either constitute a concentration falling within the scope of theCouncil Regulation (EC) No 139/2004 of 20 January 2004 on the control ofconcentrations between undertakings (the "Regulation") or are to be examined bythe European Commission as a result of a decision under Article 22(3) of theRegulation: 3.3.1 the European Commission taking a decision (or being deemed tohave taken a decision) under Article 6(1)(b) of the Regulation declaring theSwiss Re Transaction compatible with the common market, either unconditionallyor in terms reasonably satisfactory to Swiss Re, or failure of the EuropeanCommission to adopt a decision within the required time periods; or 3.3.2 the European Commission taking a decision (or being deemed tohave taken a decision) to refer the whole or part of the Swiss Re Transaction tothe Office of Fair Trading (the "OFT") under Article 9(3) of the Regulation anda statement being issued by the OFT indicating in terms reasonably satisfactoryto Swiss Re that it does not intend to refer the Swiss Re Transaction to theCompetition Commission (the "CC"), in whole or in part, either unconditionallyor in terms reasonably satisfactory to Swiss Re and the European Commissiontaking any of the decisions under paragraph 3.3.1 above with respect to any partof the Swiss Re Transaction retained by it. 3.4 Admission becoming effective or, subject to the consent of thePanel, the UKLA agreeing to admit such shares to the Official List and theLondon Stock Exchange agreeing to admit such shares to trading subject only to(i) the allotment of such shares and/or (ii) the Acquisition becoming Effective; 3.5 the Financial Services Authority giving notice in writing undersection 184(1) of FSMA, in terms reasonably satisfactory to Standard Life, ofits approval in respect of any acquisition of or increase in control over (asdefined in section 179 and section 180 of FSMA) any member of Resolution whichis a UK authorised person (as defined in section 178(4) of FSMA) which wouldresult from the Acquisition, or being treated as having given its approval byvirtue of section 184(2) of FSMA; 3.6 the Financial Services Authority giving notice in writing undersection 184(1) of FSMA, in terms reasonably satisfactory to Swiss Re, of itsapproval in respect of any acquisition of or increase in control over (asdefined in section 179 and section 180 of FSMA) any member of Resolution whichis a UK authorised person (as defined in section 178(4) of FSMA) which wouldresult from the Swiss Re Transaction, or being treated as having given itsapproval by virtue of section 184(2) of FSMA; 3.7 save where the Financial Services Authority provides in writingthat such approval is not required, the Financial Services Authority givingnotice in writing under section 184(1) of FSMA, in terms reasonably satisfactoryto Standard Life and Swiss Re, of its approval in respect of any increase incontrol or additional kind of control over (as defined in section 180 of FSMA)any member of Resolution which is a UK authorised person (as defined in section178(4) of FSMA) which would result from the proposed pre-sale reorganisation ofthe Resolution Group in connection with the Transactions, or being treated ashaving given its approval by virtue of section 184(2) of FSMA; 3.8 the Friends Provident Transaction not being approved byResolution Shareholders or otherwise lapsing or being withdrawn; 3.9 except as (i) publicly announced in accordance with the ListingRules or Disclosure and Transparency Rules by Standard Life or Resolution priorto 26 October 2007, (ii) disclosed in the annual report and accounts ofResolution for the financial year ended 31 December 2006, (iii) disclosed in theannual report and accounts of Standard Life for the financial year ended 31December 2006, (iv) disclosed in the interim financial statements of Resolutionfor the six months ended 30 June 2007, (v) disclosed in the interim financialstatements of Standard Life for the six months ended 30 June 2007, or (vi)fairly disclosed by or on behalf of Resolution or Standard Life to the otherprior to 26 October 2007, there being no provision of any agreement,arrangement, licence, permit or other instrument to which any member of theWider Resolution Group or the Wider Standard Life Group or is a party or by orto which any such member or any of its assets may be bound, entitled or subject,which in consequence of the Acquisition or because of a change in the control ormanagement of Resolution or Standard Life or otherwise, would or mightreasonably be expected to result (in each case to an extent which is materialeither in the context of the Wider Resolution Group as a whole or in the contextof the Offer, as the case may be) in: 3.9.1 any moneys borrowed by or any other indebtedness (actual orcontingent) of, or grant available to any such member, being or becomingrepayable or capable of being declared repayable immediately or earlier thantheir or its stated maturity date or repayment date or the ability of any suchmember to borrow moneys or incur any indebtedness being withdrawn or inhibitedor being capable of becoming or being withdrawn or inhibited; 3.9.2 any such agreement, arrangement, licence, permit or instrumentor the rights, liabilities, obligations or interests of any such memberthereunder being terminated or modified or affected or any obligation orliability arising or any action being taken thereunder; 3.9.3 any assets or interests of any such member being or falling tobe disposed of or charged or any right arising under which any such asset orinterest could be required to be disposed of or charged otherwise than in theordinary course of business; 3.9.4 the creation or enforcement of any mortgage, charge or othersecurity interest over the whole or any part of the business, property or assetsof any such member or any such mortgages, charge or other security interest(whenever arising or having arisen) becoming enforceable; 3.9.5 the rights, liabilities, obligations or interests of any suchmember in or to, or the business of any such member with, any person, firm orbody (or any arrangement or arrangements relating to any such interest orbusiness) being terminated or adversely modified or affected; 3.9.6 the value of any such member or its financial or tradingposition being prejudiced or adversely affected; 3.9.7 any such member ceasing to be able to carry on business underany name under which it presently does so; or 3.9.8 the creation of any liability, actual or contingent, by any suchmember, and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any memberof the Wider Resolution Group or the Wider Standard Life Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would result in or would reasonably be expected to result in any of theevents or circumstances as are referred to in sub-paragraphs 3.9.1 to 3.9.8 of this paragraph 3.9 (in each case to an extent which is material either in the context of the Wider Resolution Group as a whole or in the context of the Offer,as the case may be); 3.10 no government or governmental, quasi-governmental, supranational,statutory, regulatory, environmental or investigative body, court, trade agency,association, institution or any other body or person (whether or not agovernmental or similar body or person) whatsoever in any jurisdiction (each a "Third Party") having decided to take, institute, implement or threaten anyaction, proceeding, suit, investigation, enquiry or reference, or enacted ormade any statute, regulation, decision or order, or having taken any other stepswhich would or would reasonably be expected to (in each case to an extent whichis material either in the context of the Wider Resolution Group as a whole or inthe context of the Offer, as the case may be): 3.10.1 require, prevent or delay the divestiture, or alter the termsenvisaged or agreed for any proposed divestiture by any member of the WiderStandard Life Group or any member of the Wider Resolution Group (excluding forthe purposes of this paragraph 3.10 the divestitures contemplated by the SwissRe Transaction) of all or any portion of their respective businesses, assets orproperty or impose any material limitation on the ability of any of them toconduct their respective businesses (or any of them) or to own any of theirrespective assets or properties or any material part thereof; 3.10.2 impose any limitation on, or result in a delay in, the ability ofany member of the Wider Standard Life Group or the Wider Resolution Groupdirectly or indirectly to acquire or to hold or to exercise effectively anyrights of ownership in respect of shares or loans or securities convertible intoshares or any other securities (or the equivalent) in any member of the WiderResolution Group or the Wider Standard Life Group or to exercise managementcontrol over any such member; 3.10.3 otherwise adversely affect the business, assets or profits of anymember of the Wider Standard Life Group or of any member of the Wider ResolutionGroup; 3.10.4 make the Acquisition or its implementation or the acquisition orproposed acquisition by Standard Life or any member of the Wider Standard Lifeof any shares or other securities in, or control of Resolution void, illegal and/or unenforceable under the laws of any jurisdiction, or otherwise directly orindirectly, restrain, restrict, prohibit, delay or otherwise materiallyinterfere with the same, or impose additional conditions or obligations withrespect thereto, or otherwise challenge or materially interfere therewith; 3.10.5 require any member of the Wider Standard Life Group or the WiderResolution Group to offer to acquire any shares or other securities (or theequivalent) or interest in any member of the Wider Resolution Group or the WiderStandard Life Group owned by any third party; or 3.10.6 result in any member of the Wider Standard Life Group or the WiderResolution Group ceasing to be able to carry on business under any name underwhich it presently does so,and all applicable waiting and other time periods during which any such ThirdParty could institute, implement or threaten any action, proceeding, suit,investigation, enquiry or reference or any other step under the laws of anyjurisdiction in respect of the Acquisition having expired, lapsed or beenterminated; 3.11 all necessary filings or applications having been made inconnection with the Acquisition and all applicable waiting periods under anyapplicable legislation or regulations having expired and all statutory orregulatory obligations in any jurisdiction having been complied with inconnection with the Acquisition and all authorisations, orders, recognitions,grants, consents, licences, confirmations, clearances, permissions and approvals(collectively "Consents") reasonably deemed necessary and/or appropriate for orin respect of, the Acquisition having been obtained in terms and in a formreasonably satisfactory to Standard Life and Resolution from all appropriateThird Parties or persons with whom any member of the Wider Standard Life Groupor the Wider Resolution Group has entered into contractual arrangements, and allsuch Consents together with all material Consents reasonably necessary and/orappropriate to carry on the business of any member of the Wider Standard LifeGroup or the Wider Resolution Group remaining in full force and effect and allfilings, notifications or applications necessary and/or appropriate for suchpurpose having been made and there being no notice or intimation of anyintention to revoke or not to renew any of the same at the time at which theAcquisition otherwise becomes Effective and all necessary and/or appropriatestatutory or regulatory obligations in any jurisdiction having been compliedwith in all material respects; 3.12 except as (i) publicly announced in accordance with the ListingRules or Disclosure and Transparency Rules by Resolution or Standard Life priorto 26 October 2007, (ii) disclosed in the annual report and accounts ofResolution for the financial year ended 31 December 2006, (iii) disclosed in theannual report and accounts of Standard Life for the financial year ended 31December 2006, (iv) disclosed in the interim financial statements of Resolutionfor the six months ended 30 June 2007, (v) disclosed in the interim financialstatements of Standard Life for the six months ended 30 June 2007, (ii)implemented for the purposes of the transactions contemplated by or in theStandard Life Merger Agreement or (vii) fairly disclosed by or on behalf ofResolution or Standard Life to the other prior to 26 October 2007, no member ofthe Wider Resolution Group or of the Wider Standard Life Group having, since 31December 2006: 3.12.1 save as between Resolution and wholly-owned subsidiaries ofResolution, or as between Standard Life and wholly-owned subsidiaries ofStandard Life or for Resolution Shares issued pursuant to the exercise ofoptions granted under the Resolution Share Schemes, or for Standard Life sharesissued pursuant to the exercise of options granted under the Standard Life ShareSchemes, issued, authorised or proposed the issue of additional shares of anyclass; 3.12.2 save as between Resolution and wholly-owned subsidiaries ofResolution, or as between Standard Life and wholly-owned subsidiaries ofStandard Life or for the grant of options under the Resolution Share Schemes, orfor Standard Life shares issued pursuant to the exercise of options grantedunder the Standard Life Share Schemes issued or agreed to issue, authorised orproposed the issue of securities convertible or exchangeable into shares of anyclass or rights, warrants or options to subscribe for, or acquire, any suchshares or convertible securities; 3.12.3 other than to another member of the Resolution Group or theStandard Life Group and save as provided for in respect of Resolution in thisannouncement, recommended, declared, paid or made or proposed to recommend,declare, pay or make any bonus, dividend or other distribution whether payablein cash or otherwise; 3.12.4 save pursuant to the Acquisition, merged or demerged with any bodycorporate or acquired or disposed of or transferred, mortgaged or charged orcreated any security interest over any assets or any right, title or interest inany asset (including shares and trade investments) or authorised or proposed orannounced any intention to propose any merger, demerger, acquisition ordisposal, transfer, mortgage, charge or security interest which, in any case, isnot in the ordinary course of business and is material either in the context ofthe Wider Resolution Group taken as a whole or in the context of the Offer asthe case may be; 3.12.5 save for intra-Resolution Group or intra-Standard Life Grouptransactions, made or authorised or proposed or announced an intention topropose any change in its loan capital; 3.12.6 issued, authorised or proposed the issue of any debentures or(save for intra-Resolution Group or intra-Standard Life Group transactions),save in the ordinary course of business, incurred or increased any indebtednessor become subject to any guarantee or contingent liability, which in any case ismaterial either in the context of the Wider Resolution Group taken as a whole orin the context of the Offer, as the case may be; 3.12.7 purchased, redeemed or repaid or announced any proposal topurchase, redeem or repay any of its own shares or other securities or reducedor, save in respect to the matters mentioned in sub-paragraph 3.12.1 above, madeany other change to any part of its share capital; 3.12.8 implemented, or authorised, proposed or announced its intention toimplement, any reconstruction, amalgamation, scheme, commitment or othertransaction or arrangement which, in any case, is not in the ordinary course ofbusiness and is material either in the context of the Wider Resolution Grouptaken as a whole or in the context of the Offer, as the case may be, or enteredinto or changed the terms of any contract with any director or senior executive; 3.12.9 entered into or varied or authorised, proposed or announced itsintention to enter into or vary any contract, transaction or commitment (whetherin respect of capital expenditure or otherwise) which is of a long term, onerousor unusual nature or magnitude or which is or would be reasonably likely to bematerially restrictive on the businesses of the Wider Resolution Group or theWider Standard Life Group taken as a whole or which involves or could involve anobligation of such a nature or magnitude or which is other than in the ordinarycourse of business, and in each such case is or would be reasonably likely to bematerial in the context of the Wider Resolution Group or the Wider Standard LifeGroup taken as a whole; 3.12.10 (other than in respect of a member which is dormant and was solventat the relevant time) taken any corporate action or had any legal proceedingsstarted or threatened against it for its winding-up, dissolution orreorganisation or for the appointment of a receiver, administrative receiver,administrator, trustee or similar officer of all or any of its assets orrevenues or any analogous proceedings in any jurisdiction or had any such personappointed; 3.12.11 been unable, or admitted in writing that it is unable, to pay itsdebts or having stopped or suspended (or threatened to stop or suspend) paymentof its debts generally or ceased or threatened to cease carrying on all or asubstantial part of its business; 3.12.12 made or agreed or consented to any material change to the terms orthe trust deeds and rules constituting any pension schemes established for itsdirectors and/or employees and/or their dependants or to the benefits whichaccrue, or to the pensions which are payable, thereunder, or to the basis onwhich qualification for or accrual or entitlement to such benefits or pensionsare calculated or determined or to the basis on which such liabilities of suchpension schemes are funded or calculated, or agreed or consented to any changeto the trustees which is material and adverse in the context of the WiderResolution Group or the Wider Standard Life Group; 3.12.13 entered into any contract, transaction or arrangement which would berestrictive on the business of any member of the Wider Resolution Group or theWider Standard Life Group other than to a nature and extent which is normal inthe context of the business concerned, to an extent which is or would bereasonably likely to be material either in the context of the Wider ResolutionGroup taken as a whole or in the context of the Offer, as the case may be; 3.12.14 waived or compromised any claim otherwise than in the ordinarycourse of business and in any case which is or would be reasonably likely to bematerial in the context of the Wider Resolution Group taken as a whole; or 3.12.15 entered into any contract, commitment, arrangement or agreementotherwise than in the ordinary course of business or passed any shareholderresolution or made any offer (which remains open for acceptance) with respect toor announced any intention to, or to propose to, effect any of the transactions,matters or events referred to in this condition; 3.13 except as (i) publicly announced in accordance with the ListingRules or Disclosure and Transparency Rules by Resolution or by Standard Lifeprior to 26 October 2007, (ii) disclosed in the annual report and accounts ofResolution for the financial year ended 31 December 2006, (iii) disclosed in theannual report and accounts of Standard Life for the financial year ended 31December 2006, (iv) disclosed in the interim financial statements of Resolutionfor the six months ended 30 June 2007, (v) disclosed in the interim financialstatements of Standard Life for the six months ended 30 June 2007, or (vi)fairly disclosed by or on behalf of Resolution to Standard Life prior to 26October 2007: 3.13.1 no material adverse change or deterioration having occurred in thebusiness, assets, financial or trading position or profits of the WiderResolution Group or the Wider Standard Life Group which is material either inthe context of the Wider Resolution Group taken as a whole or in the case of theOffer, as the case may be; 3.13.2 no litigation, arbitration proceedings, prosecution or other legalproceedings to which any member of the Wider Resolution Group or of the WiderStandard Life Group is or may become a party (whether as a plaintiff, defendantor otherwise) and no inquiry or investigation by any Third Party against or inrespect of any member of the Wider Resolution Group or the Wider Standard LifeGroup having been instituted, announced or threatened by or against or remainingoutstanding in respect of any member of the Wider Resolution Group or the WiderStandard Life Group which in any such case would have or would reasonably beexpected to have a material adverse effect either on the Wider Resolution Groupas a whole or on the Offer, as the case may be; 3.13.3 no contingent or other liability having arisen or been identifiedwhich would have or would reasonably be expected to have a material adverseeffect on the Wider Resolution Group as a whole or on the Offer, as the case maybe; or 3.13.4 no steps having been taken which are likely to result in thewithdrawal, cancellation, termination or modification of any licence held by anymember of the Wider Resolution Group or of the Wider Standard Life Group whichis necessary for the proper carrying on of its respective business and theabsence of which in any case would have or would reasonably be expected to havea material adverse effect on the Wider Resolution Group as a whole or on theOffer, as the case may be; 3.14 save as (i) publicly announced in accordance with the Listing Rulesor Disclosure and Transparency Rules by Resolution prior to 26 October 2007,(ii) disclosed in the annual report and accounts of Resolution for the financialyear ended 31 December 2006, (iii) disclosed in the annual report and accountsof Standard Life for the financial year ended 31 December 2006, (iv) disclosedin the interim financial statements of Resolution for the six months ended 30June 2007, (v) disclosed in the interim financial statements of Standard Lifefor the six months ended 30 June 2007, or (vi) Standard Life not havingdiscovered in relation to the Wider Resolution Group or Resolution not havingdiscovered in relation to the Wider Standard Life Group: 3.14.1 that any financial, business or other information concerning theWider Resolution Group or the Wider Standard Life Group as contained in theinformation publicly disclosed or disclosed to Standard Life or Resolution atany time by or on behalf of any member of the Wider Resolution Group or theWider Standard Life Group as the case may be, is materially misleading, containsa material misrepresentation of fact or omits to state a fact necessary to makethat information not materially misleading; or 3.14.2 that any member of the Wider Resolution Group or the WiderStandard Life Group is subject to any liability (contingent or otherwise whichis material either in the context of the Wider Resolution Group as a whole or inthe context of the Offer, as the case may be) which is not disclosed in theannual report and accounts of Resolution or Standard Life, as the case may be,for the year ended 31 December 2006. 4 For the purposes of these conditions the "Wider ResolutionGroup", "Wider Standard Life Group" "subsidiary undertaking", "associatedundertaking", "undertaking" and "significant interest" are defined in thedefinitions in Appendix 3. 5 Subject to the requirements of the Panel in accordance withthe City Code: 5.1 Standard Life reserves the right to waive, in whole or in part,all or any of the above conditions, except the conditions in paragraphs 1, 2,3.4 (inclusive) in so far as they relate to Resolution, the Wider ResolutionGroup, or any part thereof. 5.2 Resolution reserves the right to waive, in whole or in part, allor any of the above conditions, except the conditions in paragraphs 1, 2, 3.4(inclusive) in so far as they relate to Standard Life, the Wider Standard LifeGroup, or any part thereof. 6 Either party may terminate the Standard Life MergerAgreement if at any time prior to the conclusion of the Court Hearing any ofthese Conditions becomes incapable of satisfaction or is invoked by that party. 7 The Acquisition will not proceed if, after the date of thisannouncement and before the Court Hearing: 7.1 the Acquisition is referred to the UK Competition Commission; or 7.2 the European Commission initiates proceedings in respect of theSwiss Re Transaction under Article 6(1)(c) of the Regulation. 8 If Standard Life is required by the Panel to make an offerfor Resolution Shares under the provisions of Rule 9 of the City Code, StandardLife may make such alterations to any of the above conditions as are necessaryto comply with the provisions of that Rule. 9 Standard Life may decide to implement the Acquisition by wayof an offer. In such event the Acquisition will be implemented on the same terms(subject to appropriate amendments including (without limitation) an acceptancecondition set at 50.1 per cent. of the shares to which the Acquisition relatesor such other percentage as may be required by the Panel and subject toavailability of an exemption from the registration requirements of the USSecurities Act and such amendments that Standard Life deems necessary orappropriate in respect of US Securities laws), so far as applicable, as thosewhich would apply to the implementation of the Acquisition by means of theScheme. 10 The Acquisition will be governed by English Law and be subjectto the jurisdiction of the English Courts, and to the Conditions set out in thisannouncement and in the formal Scheme Document. 11 The New Standard Life Shares, which will be issued inconnection with the Acquisition, have not been, and will not be, registeredunder the US Securities Act or under the securities law of any state, districtor other jurisdiction of the United States, Australia, Canada or Japan and noregulatory clearance in respect of the New Standard Life Shares has been, orwill be, applied for in any jurisdiction other than the UK. The New StandardLife Shares may not be offered or sold in the United States absent registrationunder the US Securities Act or an exemption from registration. It is expectedthat the New Standard Life Shares will be issued in reliance upon the exemptionfrom the registration requirements of the US Securities Act provided by Section3(a)(10) thereof. Under applicable US securities laws, persons (whether or notUS persons) who are or will be "affiliates" (for the purposes of the USSecurities Act) of Standard Life or Resolution prior to, or of Standard Lifeafter, the Effective Date will be subject to certain transfer restrictionsrelating to the New Standard Life Shares received in connection with theAcquisition. APPENDIX II BASES OF CALCULATION AND SOURCES OF INFORMATION 1. Unless otherwise stated: (i) financial information relating to Resolution has been extracted (without material adjustment) from the audited annual report and accounts for Resolution for the year ended 31 December 2006 or from the unaudited interim financial statements of Resolution for the half year ended 30 June 2007; (ii) financial information relating to Standard Life has been extracted (without material adjustment) from the audited annual report and accounts for Standard Life for the year ended 31 December 2006 or from the unaudited interim financial statements of Standard Life for the half year ended 30 June 2007; 2. The terms of the Acquisition value the Resolution Group at£4.9 billion, based on a share price of 276.25 pence per Standard Life Share(the Closing Price on 25 October 2007, the last practicable date prior to thisannouncement) and approximately 491 million New Standard Life Shares to beissued to Resolution Shareholders. 3. As at the close of business on 25 October 2007, Standard Lifehad in issue 2,173,918,591 ordinary shares of 10 pence each; and Resolution hadin issue 686,402,970 ordinary shares of 5 pence each. 4. The expected operational cost savings have been calculated onthe basis of the existing cost and operating structures of the Resolution andStandard Life groups and, in the case of Resolution, after existing plans forrationalisation and cost reduction have been implemented. These statements ofestimated cost savings and one-off costs for achieving them relate to futureactions and circumstances which, by their nature, involve risks, uncertaintiesand other factors. Because of this, the cost savings referred to may not beachieved, or those achieved could be materially different from those estimated.This statement is not intended to be a profit forecast and should not beinterpreted to mean that the earnings per share in 2007 or any subsequentfinancial period, would necessarily match or be greater than those for therelevant preceding financial period. 5. The embedded value for the Combined Group at 30 June 2007 ona combined basis amounts to £6,564 million. The embedded value methodologiesadopted by Standard Life and Resolution are materially consistent except for thereporting of non-covered businesses. Standard Life and Resolution have bothadopted a market-consistent approach to embedded value. However, while StandardLife includes its service company expenses as well as the current and futureprofits and losses from Standard Life Investments arising on its management offunds relating to the life assurance and pensions businesses on a "look-through"basis, Resolution includes these businesses on the basis of IFRS net worth.Other than moving to a consistent definition of non-covered business, the impactof fully harmonising the embedded value methodologies and assumptions would notbe expected to result in a material change to the combined embedded value. 6. The funds under management which will be retained by StandardLife under a long term contract from Swiss Re have been estimated usingResolution's 2006 FSA returns, 2006 annual report and accounts for the yearended 31 December 2006 and unaudited interim results for the period ended 30June 2007. 7. UK life and pensions market share figures are for the yearended 31 December 2006 and are sourced from the Association of British Insurers. APPENDIX III DEFINITIONS In this announcement, the following definitions apply unless the contextrequires otherwise: "Abbey" means Abbey plc; "Acquisition" means the offer by Standard Life to acquire the entire issued andto be issued share capital of Resolution plc; "Admission" means the admission of the New Standard Life Shares to the OfficialList, in accordance with the Listing Rules, and the admission of the NewStandard Life Shares to trading on the London Stock Exchange's main market forlisted securities in accordance with the Admission and Disclosure Standards; "BST" means British Summer Time; "Business Day" means a day (other than a Saturday or Sunday or public holiday)on which banks are open for business in London; "Capital Reduction" means the proposed reduction of Resolution's share capitalin connection with the Acquisition under section 135 of the Companies Act; "Citi" means Citigroup Global Markets Limited; "City Code" means the City Code on Takeovers and Mergers; "Closing Price" means the closing middle market price of a relevant share asderived from SEDOL; "Companies Act" or the "Act" means the Companies Act 1985 (as amended); "Competition Authorities" shall mean (i) all the competition authorities havingjurisdiction over the Transactions and to which notification of the Transactionsis mandatory and/or appropriate, under applicable merger control laws, and (ii)the United Kingdom and European Union competition authorities, should they havejurisdiction over the Transactions under applicable merger control laws; "Conditions" means the conditions to the Acquisition set out in Appendix I tothis announcement; "Court" means the High Court of Justice in England and Wales; "Court Hearings" means the hearings by the Court of the petition to sanction theScheme and to confirm the cancellation of the entire issued share capital ofResolution provided by the Scheme under section 137 of the Companies Act; "Court Order" means the orders of the Court sanctioning the Scheme under section425 of the Companies Act and confirming the Capital Reduction; "Disclosure and Transparency Rules" means the Disclosure and Transparency Rules,as published by the FSA; "Disposal" or "Swiss Re Transaction" means the transaction contemplated in theSwiss Re Option Agreement; "Effective" means the Scheme having become effective pursuant to its terms; "Effective Date" means the date on which the Scheme becomes Effective; "Enlarged Group" means with effect from the Effective Date, the combinedStandard Life Group/Resolution Group; "FSA" means the Financial Services Authority; "Lazard" means Lazard & Co., Limited; "New Standard Life Shares Restricted Jurisdiction" means any jurisdiction inwhich an offer of New Standard Life Shares would constitute a violation ofrelevant laws or require registration of the New Standard Life Shares; "Listing Rules" means the rules and regulations of the UKLA, as amended fromtime to time and contained in the UKLA's publication of the same name; "Loan Note Alternative" means the alternative under the Offer whereby ResolutionShareholders (other than certain overseas shareholders) may elect to receiveLoan Notes instead of all or part of the cash consideration to which they wouldotherwise have been entitled under the Offer; "Loan Notes" means the loan notes of Standard Life to be issued pursuant to theLoan Note Alternative on terms to be disclosed in the Scheme Document; "Loan Note Restricted Jurisdiction" means any jurisdiction in which an offer ofLoan Notes would constitute a violation of relevant laws or require registrationof the Loan Notes; "London Stock Exchange" means London Stock Exchange plc; "Long Stop Date" means 31 March 2008 (or such later time or date as StandardLife and Resolution may agree, with the approval of the Court and/or the Panelif required); "Merger Deed" means the Deed Poll entered into by Standard Life on the date ofthis announcement, governing the implementation of the Acquisition; "Merrill Lynch" means Merrill Lynch International; "NBC" means new business contribution; "New Standard Life Shares" means the new Standard Life shares proposed to beissued, credited as fully paid up, pursuant to the Acquisition; "New Standard Life Shares Restricted Jurisdiction" means any jurisdiction inwhich an offer of New Standard Life Shares would constitute a violation ofrelevant laws or require registration of the New Standard Life Shares; "Offer" means the offer by Standard Life to acquire the entire issued and to beissued share capital of Resolution plc; "Official List" means the official list of the UKLA; "Panel" means the Panel on Takeovers and Mergers; "pence" and "£" means the lawful currency of the United Kingdom; "Prospectus" means the prospectus, or document equivalent to a prospectus, to bepublished by Standard Life in respect of Admission; "PVNBP" means the present value of new business premiums; "RAM" means Resolution Asset Management; "Registrar of Companies" means the Registrar of Companies in England and Wales,within the meaning of the Companies Act; "Resolution" means Resolution plc; "Resolution Board" means the board of directors of Resolution; "Resolution Extraordinary General Meeting" means the extraordinary generalmeeting of Resolution Shareholders to be convened for the purposes ofconsidering and, if thought fit, approving certain resolutions required toimplement or appropriate in connection with the Scheme and the Acquisition; "Resolution Group" means Resolution, its subsidiaries and subsidiaryundertakings; "Resolution Shareholders" means the holders of Resolution Shares; "Resolution Shares" means the ordinary shares of 5 pence each in the capital ofResolution; "Resolution Share Schemes" means Resolution 1998 Unapproved Share Option Scheme;Resolution 1998 Approved Share Option Scheme; Resolution 1998 Savings RelatedShare Option Scheme; Resolution 2002 Long Term Incentive Plan; Resolution 2005Long Term Incentive Plan; Resolution 2005 Savings Related Share Option Scheme;Resolution Share Matching Plan 2006; Resolution Deferred Bonus Plan 2007; "Restricted Jurisdiction" means any jurisdiction where local laws or regulationsmay result in a significant risk of civil, regulatory or criminal exposure ifinformation concerning the Offer is sent or made available to ResolutionShareholders in that jurisdiction; "Reorganisation" means the transfer of the Life Division North companies andcertain of the Resolution Management Services Limited companies to Resolutionplc, further details of which will be set out in the Scheme Document; "Return on Embedded Value" means the post tax operating return on openingembedded value; "Scheme" means the proposed scheme of arrangement of Resolution under section425 of the Act including the cancellation of the entire issued share capital ofResolution under section 135 of the Act, as modified or varied; "Scheme Document" means the document to be dispatched to Resolution Shareholdersin relation to the Scheme comprising the particulars required by section 426 ofthe Companies Act; "Scheme Meeting" means the meeting of the Scheme Shareholders to be convened byan order of the Court under section 425 of the Companies Act to consider and, ifthought fit, approve the Scheme (with or without amendment) and any adjournmentthereof; "Scheme Record Time" means 6.00pm on the Business Day immediately preceding theEffective Date; "Scheme Shareholders" means the holders of Scheme Shares; "Scheme Shares" means (a) the existing unconditionally issued Resolution Sharesat the date of the Scheme Document; (b) any further Resolution Shares which areunconditionally issued after the date of the Scheme Document but before theScheme Voting Record Time; and (c) any Resolution Shares issued at or after theScheme Voting Record Time and before the Scheme Record Time in respect of whichthe original or any subsequent holders thereof are, or shall have agreed inwriting to be, bound by the Scheme; in each case other than any ResolutionShares beneficially owned by Standard Life; "Scheme Voting Record Time" 6.00 p.m. on the day which is two days before theScheme Meeting or, if the Scheme Meeting is adjourned, 6.00 p.m. on the secondday before the date of such adjourned meeting; "SEDOL" means the London Stock Exchange Daily Official List; "significant interest" means a direct or indirect interest in ten per cent. ormore of the equity share capital (as defined in the Companies Act) in a company; "Standard Life Extraordinary General Meeting" means the extraordinary generalmeeting of Standard Life Shareholders to consider and, if thought fit, toapprove the Acquisition and to pass certain other resolutions in connection withthe Acquisition; "Standard Life Group" means Standard Life, its subsidiaries and subsidiaryundertakings; "Standard Life Merger Agreement" means the agreement which it is proposed willbe entered into between Standard Life and Resolution governing implementation ofthe Acquisition, subject to the prior termination of the Friends ProvidentMerger Agreement and entry into such agreement being consistent with theResolution directors fiduciary duties; "Standard Life Shareholder Circular" the circular to be dispatched to StandardLife Shareholders outlining the Acquisition and containing the notice conveningthe Standard Life Extraordinary General Meeting; "Standard Life Shareholders" means the holders of Standard Life Shares; "Standard Life Shares" means ordinary shares of 10 pence each in the capital ofStandard Life; "Standard Life Share Schemes" means Standard Life Share Plan and the StandardLong Term Incentive Plan; "subsidiary", "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings ascribed to them under the Companies Act, otherthan paragraph 20(1)(b) of Schedule 4A to that Act which shall be excluded forthis purpose; "Swiss Re Option Agreement" means the option agreement entered into on or aboutthe same date as this announcement between Standard Life and Swiss Re pursuantto which, subject to the offer becoming unconditional and exercise of optionsgranted under that agreement, Standard Life would sell and Swiss Re wouldacquire certain assets of Resolution including Phoenix Life, Phoenix Pensionsand Phoenix & London Assurance and the entire issued and to be issued sharecapital of Resolution Management Services Limited, for a fixed total purchaseprice of £2.35 billion payable in cash; "Transactions" mean the Acquisition and the Disposal; "TUPE" means the Transfer of Undertakings (Protection of Employment) Regulations2006 (SI 2006/246) "UBS" means UBS Limited; "UK Listing Authority" or "UKLA" means the Financial Services Authority in theUK acting in its capacity as the competent authority for the purposes of Part VIof the Financial Services and Markets Act 2000; "US" or "United States" means the United States of America, its territories andpossessions, any state in the United States of America and the District ofColumbia; "US Securities Act" means the United States Securities Act of 1933 (as amended); "Wider Resolution Group" means Resolution and its subsidiary undertakings,associated undertakings and other undertakings in which Resolution and/or suchundertakings (aggregating their interests) have a significant interest; and "Wider Standard Life Group" means Standard Life and its subsidiary undertakings,associated undertakings and other undertakings in which Standard Life and/orsuch undertakings (aggregating their interests) have a significant interest. Unless otherwise stated, all times referred to in this announcement arereferences to London time.Any reference to any provision of any legislation shall include any amendment,modification, re-enactment or extension thereof. APPENDIX IV STANDARD LIFE INTERESTS IN SECURITIES OF RESOLUTION AS AT 25 OCTOBER 2007 Fund Registered Holder No. of Interested Investor Shares SLAC Main Fund Standard Life 1621409 Standard Life policyholdersMSCI GlobalTracker Standard Life Trust Canada 8100 Investors in the Trust Pensions UKEquitiesTracker Standard Life Investment 157028 Standard Life Funds policyholdersStandard LifeMulti AssetTrust Standard Life Trust 62179 Standard Life Managers policyholders SLTM Limited, 1 George Street, Edinburgh, EH2 2LL.BarclaysPrivateClients UKEquity Fund Standard Life Investments 162688 Barclays Investment (Corporate Funds) Limited Services 1 George Street 12th Floor Edinburgh 1 Churchill Place EH2 2LL. London E14 5HP UK Equity Fund Standard Life Investments 36381 Close Investments (Corporate Funds) Limited Limited 1 George Street 10 Exchange Square Edinburgh Primrose Street EH2 2LL. LONDON EC2A 2BYWinterthurLife UK Ltd Standard Life Investments 121912 Winterthur Life (Corporate Funds) Limited 1 George Street UK Limited Edinburgh Winterthur Way EH2 2LL. BASINGSTOKE Hampshire RG21 6SZBarclays UKAlpha Standard Life Investments 34873 Barclays Investment (Corporate Funds) Limited Services 1 George Street 12th Floor Edinburgh 1 Churchill Place EH2 2LL. LONDON E14 5HPBarclays UKEquities LuxFund Standard Life Investments 13813 Barclays Investment (Corporate Funds) Limited Services 1 George Street 12th Floor Edinburgh 1 Churchill Place EH2 2LL. LONDON E14 5HPMerrill LynchUK Equity CorePortfolio Fund Standard Life Investments 6959 Merrill Lynch (Corporate Funds) Limited 1 George Street 1700 Merrill Lynch Drive Edinburgh 2nd Floor EH2 2LL. PENNINGTON New Jersey 08534Norwich UKEquity MOM 5Fund Standard Life Investments 24958 Close Investments (Corporate Funds) Limited Limited 1 George Street 10 Exchange Square Edinburgh Primrose Street EH2 2LL. LONDON EC2A 2BYLeicestershirePension Fund Standard Life Pension Funds 127524 Leicestershire County Limited Council Standard Life House Room 139, Financial Services Resources Department 30 Lothian Road County Hall Edinburgh Glenfield EH1 2DH LEICESTER LE3 8RB George Standard Life Pension Funds 74310 The George Wimpey PensionWimpey Limited Scheme Standard Life House Gate House 30 Lothian Road HIGH WYCOMBE Edinburgh Buckinghamshire HP12 3NR EH1 2DHEnvironmentAgency Standard Life Pension Funds 167045 The Environment Agency Limited Standard Life House Rio House 30 Lothian Road Waterside Drive Aztec Edinburgh West Almondsbury EH1 2DH BRISTOL BS32 4UDTrustees ofthe QinetiQPension Scheme Standard Life Pension Funds 111233 QinetiQ Group Plc Limited Standard Life House Room 1013 Building A1 30 Lothian Road Cody Technology Park Edinburgh Ively Road FARNBOROUGH EH1 2DH Hampshire GU14 0LXHogg Robinson1987 PensionScheme Standard Life Pension Funds 39785 Hogg Robinson plc Limited Standard Life House Global House Victoria Street 30 Lothian Road BASINGSTOKE Edinburgh Hampshire RG21 3BT EH1 2DHAkzo NobelPension Scheme Standard Life Pension Funds 92111 Akzo Nobel UK Limited Limited Standard Life House Oriel House 30 Lothian Road PO Box 20980 Edinburgh 16 Connaught Place EH1 2DH LONDON W2 2ZB Aggregate holding: 2,862,308, 0.4 per cent. of the issued share capital ofResolution. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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