Standard Life and Aberdeen Asset Management agree £11bn merger

7th March 2017

Fund managers Aberdeen Asset Management and Standard Life have agreed terms to create the UK’s largest fund manager. Sir Gerry Grimstone and Simon Troughton will head up the newly merged firm as chairman and deputy chairman respectively. Following weekend reports of an £11bn takeover, the companies revealed they were recommending an all-share merger this morning. The combined group, which will oversee assets worth £660bn, will incorporate the names of both Standard Life and Aberdeen. Following completion of the merger, Aberdeen shareholders will own about a third of the combined group, with Standard Life shareholders owning the remaining two thirds.The division reflects Aberdeen’s £3.8bn market capitalisation and Standard Life’s £7.5bn value. Standard Life chairman Sir Gerry Grimstone will become chairman of the board, with Aberdeen chairman Simon Troughton becoming deputy chairman.

Standard Life and Aberdeen’s current chief executives, Keith Skeoch and Martin Gilbert, would become co-chief executives, while Bill Rattray, of Aberdeen, and Rod Paris, of Standard Life, will become chief financial officer and chief investment officer respectively. Skeoch 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.” The companies also expect the board of the combined group will comprise equal numbers of Standard Life and Aberdeen directors.

Aberdeen’s Gilbert, added: “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.” This morning, the group claimed the merger has a “compelling strategic and financial rationale”. The combined group will be headquartered in Scotland. Standard Life shareholders will be entitled to receive the proposed final dividend of 13.35p per Standard Life share for the six-month period to 31 December 2016, scheduled to be paid on 23 May 2017. Aberdeen shareholders will be entitled to receive an interim dividend of up to 7.5p for the six-month period to 31 March 2017, scheduled to be paid in June 2017.