Standard Life Aberdeen has agreed to sell the bulk of its insurance business to Phoenix Group for £3.24 billion, as it posted broadly in-line full-year results.
The deal will see SLA receive £2.3 billion in cash and a 19.9% stake in Phoenix, which becomes Europe's largest company focused on buying books of mature business from insurance companies.
SLA said the deal was for £158 billion in assets in its Standard Life Assurance Limited unit, founded in 1825 and one of the Britain's oldest life and pensions businesses.
It said it would retain its UK retail platforms and financial advice business.
The assurance business is primarily based in Britain, with operations in Ireland and Germany, and serves about 4.5 million customers and clients, it said.
As part of the deal, SLA said it would expand the companies' existing strategic partnership and look to be "the asset manager of choice" for Phoenix as it seeks more of the UK market for closed, mature business of around £300 billion.
"We are selling capital-heavy UK and European insurance businesses, moving us out of the Solvency 2 environment," co-chief executive Keith Skeoch said.
Insurers say stringent European Solvency 2 capital rules have crimped their business.
The company also reported its first set of annual results since it formed last year through the £11 billion merger of Standard Life and Aberdeen Asset Management.
SLA said pro-forma adjusted pretax profit in the year to the end of December was £1.04 billion, down 0.5% from £1.05 billion in 2016 but in line with a company-supplied consensus forecast of £1 billion.
Assets under management and administration rose 1% over the period to £654.9 billion, although the company said it continued to see outflows from its asset management as market conditions remained "tough".
Net outflows over the period were £22.1 billion, it said, an improvement on the previous year outflows of £26.1 billion and beating a company supplied analyst forecast for £37.5 billion in outflows.
SLA said it would pay a full-year dividend of 21.3 pence a share, up 7.5% on the prior year.