The £3.2bn sum comprises cash payable on completion of £2bn, a dividend to be paid to Standard Life Aberdeen of £300m in Q2 2018 and new shares issued at completion representing 19.99% of the then issued share capital of Phoenix Group, following the completion of the rights issue undertaken to part finance the acquisition and worth £1bn based on Phoenix Group's share price on 22 February 2018.
The sale involves the disposal of Standard Life Assurance Limited, with Standard Life Aberdeen retaining its United Kingdom retail platforms and financial advice business.
The firm was also hit by a move by Lloyds Banking Group earlier this month which announced it is to withdraw £109bn of assets now managed by Standard Life Aberdeen for Scottish Widows, almost 17% of Standard Life Aberdeen's AUM.
Shares in Standard Life Aberdeen rose 3% to 397.2p on the news, while Phoenix jumped 5.4% to 800.5p.
Earlier this month, Scottish Widows and Lloyds Banking Group's Wealth businesses terminated their partnership agreements with Aberdeen Asset Management due to its merger with competitor Standard Life.More news: Interior Ministry says 2 killed in Afghan attack
Standard Life Aberdeen will continue to be the asset manager for the insurance business acquired by Phoenix as well as the assets it already manages for Phoenix.
In the first results since the merger of Standard Life and Aberdeen Asset Management, the firm has said it has chose to exit the insurance market.
The firm said it remains committed to running all three of its adviser platforms, Standard Life Wrap, Elevate and Parmenion, separately, as to continuing to grow national advice business 1825.
It will also enable Standard Life Aberdeen to accelerate its growth strategy through targeted investments.
Skeoch was formerly the CEO of insurer and asset manager Standard Life, which completed an 11 billion pound merger with Scottish rival Aberdeen Asset Management in August a year ago.More news: Michy Batshuayi hits back at racist fans
Scottish Widows said it could reconsider the mandates if Standard Life Aberdeen made changes to ensure it was not competing in Scottish Widows' core areas.
A spokesman for Standard Life Aberdeen declined to comment.
'While flows in this area remained negative in 2017, we have seen the start of a turnaround as investors start to question how much longer the rally in equity markets can last, ' it said.
Grimstone has been with Standard Life for 11 years and was widely regarded as being instrumental to last year's merger with Aberdeen.More news: Bruce McArthur now charged with murders of six men: Toronto police