Hundreds of British finance jobs are set to go as a merger between Aberdeen Asset Management and Standard Life is confirmed. It's expected that the deal will create one of the world's largest investment groups.
The two companies confirmed the merger early on Monday after British media revealed at the weekend that the pair were locked in talks to create a new European investment powerhouse.
"The boards of Standard Life plc and Aberdeen Asset Management plc are pleased to announce that they have reached agreement on the terms of a recommended all-share merger," the pair said in a statement.
Under the £11-billion ($13.5-billion, 12.7-billion-euro) deal, Standard Life shareholders will have overall control with a 66.7-percent stake in the new company. Aberdeen will hold the remaining 33.3 percent.
The newly merged group would likely continue to bear the names Aberdeen and Standard Life, and would manage around 660 billion pounds of global assets from its headquarters in Edinburgh, the joint statement said.
The two groups said over the weekend they aimed to complete the merger in the third quarter, with the tie-up subject to regulatory approvals.
Job losses confirmed
On Monday, Aberdeen's CEO Martin Gilbert told BBC Radio the deal would mean "some job losses where there is overlap." But he said a figure of 1,000 cuts quoted in British media was "way exaggerated."
Britain's "Daily Telegraph" newspaper cited a City analyst as saying that the deal would allow about 200 million pounds in cost savings, most of which would likely come from job losses. The paper said hundreds if not thousands of jobs could be on the line from the merger.
Between them, Aberdeen and Standard Life employ about 9,000 people, and more than 8,000 are based in Scotland.
Still the expected cuts comes as Britain's financial center prepares for an exodus of financial services staff after the country voted to leave the European Union last June.
Established in 1825, Standard Life is based in the Scottish capital, and handles pensions, savings, insurance and investments and has around 4.5 million customers.
Aberdeen is currently based in the city it is named after on Scotland's northeast coast. It was established in 1983 and was listed on the London Stock Exchange in 1991. It operates in 25 countries and styles itself as "one of Europe's largest public, pure-play investment managers."
mm/hg (AFP, Reuters)