Britannic Group said it has agreed to acquire Century Group and its subsidiaries for an estimated £43.7 million.
In a separate statement, Aberdeen Asset Management said it has lost its investment management contract with Century under the purchase agreement with Britannic.
This will have little or no financial impact on Aberdeen's results, it said, but it will bring funds into the company as Century redeems £11.3 million of preference shares held by Aberdeen.
Century Group has been an early consolidator of 21 closed life funds since 1983 and manages 370,000 policies, mainly non-profit and unit linked business, with total assets of approximately £1.7 billion as at March 31 2004.
Britannic, which employs 735 administrative staff at its site at Wythall, Worcestershire, expected that the embedded value of Century Group as at March 31 2005 will amount to approximately £63.5 million.
The purchase is subject to FSA clearance of change of control and is due to be completed by the end of March.
Britannic said it was confident of achieving its stated return criteria of at least 12 per cent post tax on risk based capital for this transaction. It will also enhance dividend paying capacity, it said.
Paul Thompson, chief executive of Britannic, said: "This is an attractively priced acquisition which continues the momentum towards our aim of being a major owner and administrator of closed UK life funds."