Fund managers Aberdeen and Standard Life have agreed terms on an all-share merger that will create a combined business with assets under administration of over GBP660 billion and 9,000 employees.
The combined group be rebranded to incorporate the names of both Standard Life and Aberdeen.
Under the terms of the merger, holders of Aberdeen shares will be entitled to receive 0.757 new shares in exchange for each Aberdeen share.
Based on this exchange ratio and the closing price of 378.5p per Standard Life share on 3 March 2017, the merger values each Aberdeen share at 286.5p and Aberdeen’s existing issued ordinary share capital at approximately GBP3.8 billion.
Following completion of the merger, Aberdeen shareholders would own approximately 33.3 per cent and Standard Life shareholders would own approximately 66.7 per cent of the combined group on a diluted basis.
The combined group, which will be headquartered in Scotland, will see Sir Gerry Grimstone, chairman of Standard Life, become chairman of the board, with Simon Troughton, chairman of Aberdeen, becoming deputy chairman.
Keith Skeoch (pictured), CEO of Standard Life, and Martin Gilbert, CEO of Aberdeen, will become co-CEOs of the combined group.
Bill Rattray, of Aberdeen, and Rod Paris, of Standard Life, will become CFO and CIO respectively.
It is envisaged that the board of the combined group will comprise equal numbers of Standard Life and Aberdeen directors.
Skeoch says: “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. 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.”