Standard life has announced that it will merge with fund manager rival Aberdeen Asset Management in a £3.8 billion deal.
The merger will create one of Europe’s largest fund managers, overseeing assets worth £660 billion.
Under the terms of the deal Standard Life shareholders will own 66.7 per cent of the combined group. Aberdeen investors will receive 0.757 replacement shares for every share they already own.
This reflects Standard Life’s £7.5 billion market share and Aberdeen’s £3.8 billion, the report says.
Aberdeen chief executive Martin Gilbert said this morning that both companies, which currently employ a combined 11,000 workers, will cut jobs in a £200 million cost savings exercise.
“There will be some job losses where there is overlap,” he said.
“This is not about saving money; this is about complementary businesses hoping to grow their revenues.”
He added: “We believe this merger is excellent for our clients, bringing together the strong and highly 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.”
Keith Skeoch, chief executive officer of Standard Life, said: “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.”
Both parties said completion of the deal is at the discretion of shareholders.