Aberdeen Standard Investments agreed to establish a joint venture with Virgin Money for retail money management.
A regulatory statement by Virgin Money on Tuesday said the proposed combination will bring together its brand and retail distribution capabilities with Aberdeen Standard Investments' money management expertise.
Virgin Money has more than 200,000 retail clients and £3.7 billion ($5.2 billion) in assets under management.
The proposal will see Aberdeen Standard acquire 50% of Virgin Money Unit Trust Managers, Virgin Money's investments and retirement business, for an upfront cash payment in excess of £40 million. The deal is set to close by the end of the year.
"We're delighted to be partnering with Virgin Money to develop their retail investment business," said Martin Gilbert, co-CEO at Aberdeen Standard Investments, in the statement.
Aberdeen Standard manages about €638 billion ($784 billion) in assets.