Amid rising speculation at the weekend, Standard Life confirmed that it was in merger talks with Aberdeen Asset Management.
The Boards of both companies said they were discussing a possible all-share merger of which Aberdeen shareholders would own 33.3% and Standard Life shareholders would own 66.7% of the combined group.
A statement issued at the weekend said that the potential merger represents an excellent opportunity to leverage Standard Life and Aberdeen’s combined strengths to create a world class investment company.
The statement highlighted the perceived benefits:
- “harness Standard Life and Aberdeen’s complementary, market leading investment and savings capabilities which would deliver a compelling and comprehensive product offering for clients covering developed and emerging market equities and fixed income, multi-asset, real estate and alternatives;
- “establish one of the largest and most sophisticated investment solutions offerings globally, positioning the Combined Group to meet the evolving needs of clients;
- “reinforce both Standard Life and Aberdeen’s long-standing commitment to active management, underpinned by fundamental research, with both global reach and local depth of resources;
- “create an investment group with strong brands, leading institutional and wholesale distribution franchises, market leading platforms and access to long-standing, strategic partnerships globally;
- “bring scale, as one of the largest active investment managers globally with £660bn of proforma assets under administration and financial strength, transforming the Combined Group’s ability to invest for growth, innovate and drive greater operational efficiency;
- “deliver through increased diversification an enhanced revenue, cash flow and earnings profile and strong balance sheet that is expected to be capable of generating attractive and sustainable returns for shareholders, including dividends;
- “result in material earnings accretion for both sets of shareholders, reflecting the significant synergy potential of a combination.”
It was also confirmed that should the merger take place Standard Life Chairman Sir Gerry Grimstone would become Chairman of the Board, with Aberdeen’s Chairman Simon Troughton becoming Deputy Chairman.
Also that Keith Skeoch, CEO of Standard Life and Martin Gilbert, CEO of Aberdeen, would become co-CEOs. Bill Rattray of Aberdeen and Rod Paris of Standard Life would become CFO and CIO respectively.
Under the terms of any potential deal, Aberdeen shareholders would receive a merger ratio of 0.757 new Standard Life ordinary shares for each Aberdeen ordinary share.
Discussions between the parties remain ongoing and the timing of any formal announcement remains conditional on satisfactory completion of mutual due diligence.