The deal, subject to a number of conditions including shareholder approval, will create a combined group with £660 billion of assets under administration globally. This will make the group the largest active investment manager in the UK and the second-largest in Europe.
The combined group will be headquartered in Scotland, and will eventually be re-branded to incorporate the names of both entities. The deal is expected to be closed in Q3 2017.
After completion of the merger, Standard Life shareholders will own 66.7 percent of the group, while Aberdeen AM’s shareholders will own approximately 33.3 percent.
Aberdeen Asset Management is currently valued at around £3.8 billion, and Standard Life is reportedly valued at about £7.5 billion.
On completion of the merger, Gerry Grimstone, chairman of Standard Life, will become chairman of the board of the group. Simon Troughton, chairman of Aberdeen, will become deputy chairman. It is expected the board will have equal representation.
Keith Skeoch, CEO of Standard Life, and Martin Gilbert, CEO of Aberdeen, will become co-CEOs of the group.
Skeoch said: “We have always been clear that it is Standard Life’s ambition to become a world-class investment company and that this would be achieved through continued investment in diversification and growth, coupled with a sharp focus on financial discipline. We are therefore delighted that this announcement marks another important step towards achieving that ambition.”
He added: “The combination of our businesses will create a formidable player in the active asset management industry globally. We strongly believe that we can build on the strength of the existing Standard Life business by combining with Aberdeen to create one of the largest active investment managers in the world and deliver significant value for all of our stakeholders.”
Gilbert said: “We believe this merger is excellent for our clients, bringing together the strong and highly complementary investment capabilities of each firm with a breadth and depth of talent unrivalled amongst UK active managers and positioning the business to meet the evolving needs of clients and customers. This merger brings financial strength, diversity of customer base and global reach to ensure that the enlarged business can compete effectively on the global stage.”