Aberdeen Asset and Standard Life complete £11bn merger

October 2017 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

October 2017 Issue

In a transaction which creates Europe’s second-biggest fund manager, Aberdeen Asset Management PLC and Standard Life plc have completed an £11bn merger to become Standard Life Aberdeen plc.

First announced in March 2017, the deal between the two companies means the formation of a new entity with offices in 50 cities around the world, a global workforce of 9000 (including 1000 investment professionals), clients in 80 countries, a market cap of over £11bn and assets under administration of £670bn.

The merger harnesses Standard Life’s and Aberdeen’s complementary, market leading investment and savings capabilities, creating an investment group with strong brands, leading institutional and wholesale distribution franchises, market leading platforms and access to longstanding, strategic partnerships globally.

Moreover, the legal function at the new company will be divided into two main divisions – one dedicated to asset management and the other to pensions and savings. General counsel within the asset management division will be Gordon Brough, formerly Aberdeen Asset Management’s general counsel, while group general counsel of the merged firm will be Rushad Abadan, who joined Standard Life in January 2016 from RBS.

“As ever our priority remains the delivery of strong investment performance and the highest level of client service,” said Martin Gilbert, chief executive of Aberdeen who will lead the new company alongside Keith Skeoch as co-chief executives. “The merger deepens and broadens our investment capabilities, and gives us a stronger and more diverse range of investment management skills as well as significant scale across asset classes and geographies. We believe this will enable us to deliver an even better proposition and service to our enlarged client base.”

Reiterating longstanding commitments to active investment management, the newly combined business has also pledged a similar investment culture and approach underpinned by fundamental research. Also, as one of the largest active managers in Europe, Standard Life Aberdeen offers clients access to a comprehensive range of developed and emerging market equities and fixed income, multi-asset, real estate and alternatives solutions.

However, with a cost savings target of £200m a year, Standard Life Aberdeen has said that it expects to cut approximately 800 jobs over three years as a result of the merger, with additional savings believed to be coming from reductions in legal, professional and consultancy fees.

As far as the combined company’s pensions and savings operations are concerned, Standard Life has approximately 4.5 million customers and is based primarily in the UK, with additional operations in Ireland and Germany. The business has established a market-leading position through a long-term commitment to support the needs of employers and their employees. For example, over one in six people auto-enrolled into a workplace pension in the UK enjoys the benefits of a Standard Life workplace pension.

“This deal marks the culmination of many months of hard work and preparation by our business and the beginning of a new chapter in our history as Standard Life Aberdeen plc,” said Keith Skeoch, chief executive of Standard Life. “Our leadership team is in place and we have full business readiness from day one. Our people have worked exceptionally well together to complete the merger on schedule and we would like to thank them for this.”

Acting as advisers for Aberdeen Asset Management on the merger were Freshfields and Maclays while Slaughters took the lead role for Standard Life.

The transaction was given the go-ahead by the Competition and Markets Authority (CMA) in June.

Mr Skeoch concluded: “The co-operation and collaboration we have witnessed bodes well for the on-going integration of the business, and in helping us create a world-class investment company for our clients, shareholders and our people.”

Fraser Tennant