Standard Life in talks to acquire Aberdeen Asset Management

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Standard Life in talks to acquire Aberdeen Asset Management

Two of the UK's biggest financial firms Aberdeen Asset Management and Standard Life are exploring an £11bn merger deal, which would create a global powerhouse running over £600bn worth of assets.

It would bring together diverse investment talents such as Standard Life's smaller company star manager Harry Nimmo and Aberdeen's Asia veteran Hugh Young.

Under the terms of the proposed deal, Aberdeen shareholders would own 33.3 percent of the combined group under the terms of the potential merger, with Standard Life shareholders owning the other 66.7 percent, the companies said.

In a statement rushed out yesterday evening after news of the negotiations broke, both groups confirmed they were thrashing out details for an all-share merger.

Some analysts have predicted that Mr Gilbert - who is also a director of Sky plc (Frankfurt: 893517 - news), the owner of Sky News - will be forced to cut Aberdeen's dividend, although when he updated the City on trading in January, he struck a positive tone.

Aberdeen has a market value of £3.7bn, roughly half the size of Standard Life, with one source saying this weekend that any deal was likely to be an all-paper transaction.

Standard Life said in a statement Saturday that the completion of a merger will be subject to shareholder approval.

However, both companies have had a torrid few years.

Standard Life Chairman Gerry Grimstone would become Chairman of the Board of the Combined Group, with Aberdeen Chairman Simon Troughton becoming Deputy Chairman.

Standard Life Investments, which has a partnership with John Hancock, now sells nine products to USA investors and oversees about £12.5 billion of assets there.

- There would be "significant synergy potential", Edinburgh-based Standard Life said, but it did not say how large the potential cost or revenue benefits would be.

The combined firm would manage assets of about 660 billion pounds.

Both Aberdeen and Standard Life's investment unit reported outflows in 2016 after investors pulled money in the aftermath of Britain's shock decision to leave the European Union and Donald Trump's presidential election victory.

"Standard Life and Aberdeen's long-term success has been built through differentiated, but complementary, strategies that have delivered attractive growth and returns for clients and shareholders". The chief executive has previously said he wanted to do a deal similar to Henderson Group's cross-border merger with Janus Capital Group.

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