Standard Life and Aberdeen Asset Management announced today that they have reached agreement on a recommended merger which will see the two combine to create a group with £660bn in assets under management and financial strength.

The all-share merger of Standard Life and Aberdeen would see Aberdeen taking a third of the new business and Standard Life two thirds. The combined group will use both Standard Life and Aberdeen brands. News of the deal was leaked over the weekend but have only been confirmed today.

Under the terms of the deal, which will require at least 75% shareholder approval, Aberdeen shareholders would own approximately 33.3 per cent and Standard Life shareholders would own approximately 66.7 per cent of the combined group. 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

The companies says that the merger has a “compelling strategic and financial rationale” and will combine Standard Life’s and Aberdeen’s strengths to create a “world class investment group.”

Standard Life and Aberdeen say that the merger will “harness” Standard Life’s and Aberdeen’s complementary investment and savings capabilities covering developed and emerging market equities and fixed income, multi-asset, real estate and alternatives. They say it will also reinforce Standard Life’s and Aberdeen’s commitment to active management.

The combined group will be headquartered in Scotland. Aberdeen's market capitalisation is currently £3.8bn and Standard Life's £7.5bn, meaning the new group will have a joint capitalisation of £11.3bn.

Following completion of the merger: Gerry Grimstone, chairman of Standard Life, will become chairman of the board of the combined group, with Simon Troughton, chairman of Aberdeen, will become deputy chairman. Keith Skeoch, chief executive of Standard Life, and Martin Gilbert, chief executive 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, says Standard Life.

Keith Skeoch, CEO of Standard Life 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. 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.”

Martin Gilbert, CEO of Aberdeen 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.”

Standard Life was established in Edinburgh in 1825. The company employs approximately 6,300 people internationally – through businesses in the UK, Europe, North
America, Asia and Australia. It has around 4.5 million customers and clients in 45 countries. Standard Life Investments actively manages £278 billion worldwide.

Aberdeen Asset Management was formed in 1983 and operates in 25 countries. It manage assets of £302.7 billion as at 31 December 2016.