London: Standard Life Plc and Aberdeen Asset Management Plc, two of the UK’s largest fund managers, have been holding talks about an £11 billion ($13.5 billion) merger that would create one of the world’s biggest asset managers, Sky News reported on its website, without saying how it obtained the information.
The merged company would manage more than £600 billion and employ more than 9,000 people, with a possible annual cost savings of £200 million, Sky said. The combined company may be run jointly by Martin Gilbert and Keith Skeoch, the chief executives of Aberdeen and Standard Life, respectively, while Gerry Grimstone, Standard Life’s chairman, would probably chair the new group, Sky reported.
Standard Life has a market value of £7.5 billion, almost double the £3.77-billion value of Aberdeen. Standard Life shares have risen 1.75% so far this year, closing at 378.5 pence on Friday. Aberdeen’s stock is up 11.3%, closing at 286.4 pence.
Merger talk has swirled around Aberdeen in recent weeks amid outflows from its funds as a strengthening US dollar encourages investors to switch money out of emerging markets, where Aberdeen is strongest. The company said on 2 February that assets under management fell to £302.7 million in the final quarter of the year, a decline of £10.5 billion in the period.
Investor sentiment stalled following Donald Trump’s victory in the US presidential election, with investors putting asset allocation decisions on hold, CEO Martin Gilbert said. Aberdeen also has been looking to the US for possible transactions, including the purchase of Pioneer Investments’ US business, Sky reported.
A Standard Life spokesman declined to comment. Aberdeen’s spokesman said he wasn’t immediately able to comment