Lloyds Banking Group will acquire £19 billion of United Kingdom pensions and savings assets from insurance company Zurich.
The bank, which returned to full private ownership in May after the Government sold the last of its stake, said the deal would boost its Scottish Widows division by adding £19bn in assets and 500,000 customers.
It will see Zurich gain exclusive distribution rights for group life protection to certain corporate clients of Lloyds' commercial banking services.
The bank said the deal would build on Scottish Widows' current offering while delivering a modern, flexible workplace savings platform and an enriched customer experience.
Scottish Widows manages more than £124bn of assets, of which £35bn is in workplace pensions.
In addition, 200 Zurich employees in Cheltenham are expected to transfer to Lloyds.
A Zurich spokesman said that the acquisition is expected to partially close in the first quarter of 2018, with the transfer of assets to follow, subject to the necessary regulatory and legal approvals.
He warned that a charge cap on these schemes illustrates the wider fee pressure on fund management, which means there is strength in numbers for the likes of Scottish Widows and Zurich, not least due to the increasing regulation faced by financial services firms.
"We are.focusing on markets where we have strong assets and can best serve our customers and distributors", said Tulsi Naidu, chief executive of Zurich UK.
'Our UK life and savings strategy is simple: to establish market leading positions in retail wealth, and retail and corporate protection, while growing our new corporate longevity and de-risking business, ' she said. The parties, however, did not disclose the financial terms of the deal.