Investec Wealth & Investment U.K. agreed to combine with U.K. wealth manager Rathbones in an all-share deal that will create a £100 billion ($123.3 billion) wealth business, an Investec spokesman confirmed.
Under the deal, which is set to be completed in the fourth quarter, new Rathbones shares will be issued in exchange for 100% of Investec W&I UK's share capital.
Investec Group, the parent company of Investec W&I U.K., will become a shareholder in the enlarged company and own a roughly 41.25% stake.
The deal values Investec W&I U.K. at £839 million, according to a news release Tuesday.
The companies said Tuesday that the combination will enhance their investment management, financial planning, and create multichannel distribution capability across private clients, intermediaries and charities.
The combined business, Enlarged Rathbones Group will be headquartered at Investec's offices and will operate across the U.K. It will continue to be chaired by Clive Bannister with the executive leadership team, under Rathbones' CEO Paul Stockton.
The combination is conditional on the approval of Rathbones' shareholders, which is expected in the second quarter, as well as regulatory approvals, including from the U.K. Financial Conduct Authority.
"This transaction not only presents a compelling strategic and financial rationale, but also accelerates Rathbones' growth strategy. Operating at scale allows the group to offer an even more attractive proposition to clients and colleagues, supporting future growth and creating significant value for Rathbones' shareholders," Mr. Bannister said in the news release.
Fani Titi, Investec Group CEO, added in the release: "The transaction represents a real step-change and long-term opportunity for our U.K. wealth strategy, underscores our commitment to the U.K. wealth management market and enhances our U.K. business as a whole."