Standard Life PLC and Aberdeen Asset Management PLC are in talks about an all-share merger, said a joint statement by the firms.
The potential merger would see Aberdeen shareholders own 33.3% of the combined group, with Standard Life shareholders owning the remaining 66.7%.
The statement said the firms expect the potential merger to harness complementary investment and savings capabilities, which span developed and emerging market equities and fixed-income, multiasset, real estate and alternatives. Any deal would reinforce Standard Life and Aberdeen's long-standing commitment to active management underpinned by fundamental research, and would bring scale.
The deal would create "one of the largest active investment managers globally with £660 billion ($819.5 billion) of proforma assets under administration," as well as financial strength to enable the combined group to invest for growth, to innovate and drive greater operational efficiency.
Keith Skeoch, CEO of Standard Life, and Martin Gilbert, CEO of Aberdeen, would become co-CEOs. Aberdeen's finance director Bill Rattray would become chief financial officer, and Standard Life chief investment officer, Rod Paris, would become chief investment officer of the combined group. The statement said it is envisaged that the board of directors of the combined group would comprise equal numbers of Standard Life and Aberdeen directors.
Under the terms of the potential merger, Aberdeen shareholders would receive a merger ratio of 0.757 new Standard Life ordinary shares for each Aberdeen ordinary share.
Discussions are ongoing regarding other terms and conditions. A formal announcement remains conditional on, among other things, agreement on other terms and conditions, satisfactory completion of mutual due diligence, and approval of the boards of each firm. Completion of a merger will be subject to shareholder and regulatory approvals.
The statement said there can be no certainty that any deal will occur. Standard Life has until 5 P.M. GMT on April 1, either to announce a firm intention to make an offer for Aberdeen, or to announce it does not intend to make an offer. The deadline will only be extended with the consent of the U.K. Takeover Panel.