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Major investors set to merge

Investors Aberdeen Asset Management and Standard Life have agreed to merge.

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The two firms agreed terms for an all-share merger but the deal is subject to conditions including shareholder approval.

Standard Life has a number of investments in social housing including in bonds issued by Notting Hill Housing Group and under UK government guaranteed-scheme, administered by Affordable Housing Finance.

It is understood that one rationale for the merger is that the two organisations have complementary investments including in property.

The merger would create the UK’s largest fund manager with £660bn of assets.

Investment experts said the merged group’s larger size and ability to cut costs would help it compete with bigger investment managers like Blackrock, which signed its first social housing direct loan deal recently.

In a statement to investors, Standard Life said it expected to make pre-tax savings of £200m a year by three years after the merger. The savings would come from merging back office functions, consolidating in locations where both companies have a presence and reduction in professional fees. The statement said there would be a cost of £320m to integrate the two companies.

The merged organisation would be chaired by Standard Life’s chairman Sir Gerry Grimstone with Aberdeen’s chairman Simon Troughton becoming deputy chairman.

Keith Skeoch, chief executive of Standard Life and Martin Gilbert, chief executive of Aberdeen, would become co- chief executives of the combined group. In addition, Bill Rattray of Aberdeen and Rod Paris of Standard Life would become chief financial officer and chief investment officer.

The merger will be effective from the third quarter of 2017 if it is approved.

Martin Gilbert, chief executive of Aberdeen, said the merger would ‘ensure that the enlarged business can compete effectively on the global stage’.


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