Aberdeen Asset Management has agreed to an all-share merger with Standard Life to create UK's largest active asset managers with £660bn in assets under administration.
Based in Scotland, the combined entity will focus on developed and emerging markets equities, multi-assets, fixed income, real estate and alternatives. The new entity would draw branding from both Standard Life and Aberdeen.
Shareholders of Aberdeen and Standard Life would own about 33.3% and 66.7% of the merged entity, respectively.
Standard Life CEO Keith 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. The combination of our businesses will create a formidable player in the active asset management industry globally.”
The combined group would be jointly headed by Standard Life CEO Keith Skeoch and Aberdeen CEO Martin Gilbert as co-CEOs.
Standard Life chairman Sir Gerry Grimstone would become chairman of the board of the combined group, Aberdeen chairman Simon Troughton would take up the role of deputy chairman, Aberdeen CFO Bill Rattray would assume the position of CFO while Standard Life CIO Rod Paris would become CIO of the combined entity.
Aberdeen CEO Martin Gilbert added: "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."
The transaction, currently subject to shareholder and regulatory approvals, is expected to lead to cost savings of £200m. The companies said that the new group would take a one-off £320m cash charge to cover integration costs.