Standard Life and Aberdeen Asset Management have agreed terms for a potential merger to create one of the UK’s largest fund managers overseeing £660 billion in assets.
Both firms confirmed they are in discussions for Standard Life to acquire its rival Aberdeen for £3.8 billion in a potential all-share merger, which would cover developed and emerging market equities, fixed income, multi-asset, real estate and alternatives products.
Standard Life CEO, Keith Skeoch, and Martin Gilbert, CEO of Aberdeen would head up the merged entity as co-CEOs and the board of directors would consist of a equal numbers from both parties.
Under the terms of the potential merger, Aberdeen shareholders would receive a merger ratio of 0.757 new Standard Life ordinary shares for each Aberdeen ordinary share, although discussions on these terms are currently ongoing.
Skeoch commented: “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.
“The combination of our businesses will create a formidable player in the active asset management industry globally.”
Gilbert added the merger is ‘excellent for our clients’ and will bring together the complementary investment capabilities of each firm.
“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,” he said.
The potential merger is subject to shareholder and regulatory approval.