The planned all-share merger between Standard Life and Aberdeen Asset Management is expected to result in 800 job losses across the businesses over the three-year integration period.
Total global headcount of the combined group was 9,000 as of Dec. 31, said a prospectus document for Standard Life shareholders published late Tuesday.
An Aberdeen Asset Management spokesman said: “The 800 figure is a global one and it is far too early to comment on specific areas, but retaining and attracting fund manager talent is certainly a top priority. It is hoped headcount reduction will come largely from natural employee turnover arising from retirements and people moving to other firms during the three-year integration period. The turnover of the combined businesses over the recent years has been around 10% per annum.”
A Standard Life spokesman said it is too early to comment on a breakdown.
The firms announced plans to merge in March, creating a money manager with around £670 billion ($867 billion) in assets under management. The deal to create Standard Life Aberdeen PLC is expected to be completed in the third quarter. The two firms also announced the investment management business will be named Aberdeen Standard Life Investments. The retirement and savings unit will be called Standard Life.
The deal is subject to shareholder approvals. The firms plan to implement the merger by way of a court-sanctioned scheme of arrangement of Aberdeen, which will become effective if approved by 75% of Aberdeen shareholders present and voting at the relevant court meeting. The meeting will be held June 19, said a regulatory filing by Aberdeen Tuesday. If subsequently sanctioned by the court, a general meeting will be held by Aberdeen.
The merger is also subject to approval by Standard Life shareholders, which will hold its own general meeting on June 19.
Job losses represent part of the expected £200 million in cost synergies by the combined group over three years. The prospectus said Standard Life and Aberdeen “expect to achieve cost synergies where duplication exists and by taking advantage of opportunities to leverage the additional scale of the combined group.”
About 31% of the identified cost savings are expected to come from simplifying and harmonizing platforms, by the consolidation of the operating, trading and other platforms used by both organizations. A reduction in the number of third-party service providers is also expected to save costs.
About 16% of savings are set to come from eliminating distribution overlap, by consolidating operations where both operate in close geographic proximity. A further 12% of savings are expected across other central functions.
Additional savings will come from a reduction in travel costs and reduced legal, professional and consultancy fees, “as well as other sources such as removing areas of duplication in investment management capability while retaining the best of both franchises and talent,” said the prospectus.