The Scottish Investment Trust (SCIN) has proposed a merger with JP Morgan Global Growth & Income trust (JGGI) as part of a strategic review.
The £679.8m Edinburgh-based trust said that the combination with JGGI will result in an enlarged company with net assets of more than £1.2bn.
It also noted that that transaction could represent the most compelling outcome for SCIN shareholders.
Commenting on the development, SCIN chairman James Will said: “Our two companies were both launched in 1887, and this combination will reflect both of their proud histories within a single vehicle with relevance for the investment market place today.
“JGGI offers a style-agnostic total return approach that has delivered index-beating performance, and it distributes an attractive level of dividend to investors.”
The companies have signed ‘heads of terms’ in connection with the proposed deal, which is subject to approval by shareholders of both firms.
Additionally, JPMorgan will be appointed as the alternative investment fund manager of SCIN and will manage the SCIN investment portfolio in line with the investment policy and strategy of JGGI.
Meanwhile, JGGI in a separate statement said that the proposed combination would allow its shareholders to benefit from ‘the greater economies of scale’.
The merger, also subject to regulatory and tax approvals, is expected to conclude in the first quarter of next year.
Following the transaction, SCIN board members will join the board of JGGI.
JGGI board will continue to be chaired by Nigel Wightman until his previously announced retirement at the end of this month. Wightman will be then succeeded by Tristan Hillgarth.