The proposed merger between Standard Life and Aberdeen
may lead to the loss of 800 jobs, according to documents
released by the asset management firms on Tuesday.
The firms estimated in regulatory documents that about 9 percent
of Standard Life and Aberdeens combined workforce will be
eliminated over three years as part of their integration. The
merged company will be renamed Standard Life Aberdeen plc, with
headquarters in Scotland.
In Tuesdays documents, Gerry Grimstone the
current chairman of Standard Life and proposed chair of the
combined company reiterated the reasons behind the
merger, referencing headwinds faced by the asset management
industry such as technological change and the
continuation of the slow growth, low inflation,
compressed return environment.
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, he said in the documents.
Under the agreement announced in March, Standard Life will
pay £3.79 billion ($4.9 billion) for its purchase of
Aberdeen. The deal gives Standard Life shareholders 66.7
percent of the combined firm.
This merger will create a highly, diversified
active-focused investment manager with complementary investment
skills and capabilities across all major asset classes,
Grimstone said in Tuesdays documents.
Despite the benefits of scale, the firms noted the risk of
their all-in approach to active management
Were there to be a further significant shift towards
investors investing through passive or index-based investment
products rather than investing in the funds managed by the
Standard Life Group and the Aberdeen Group ... such
developments could have a material adverse effect, the
firms said in the regulatory documents.
Both firms have suffered recent outflows as active fund
managers struggle to attract and retain assets amid the shift
toward passive index funds. Aberdeen has reported net
redemptions for 16 straight quarters, while investors withdrew
£2.6 billion from Standard Lifes Global Absolute
Return Strategies fund in 2016.
After the merger is completed, Standard Life Aberdeen will
manage £670 billion in combined assets, making it the
largest active manager in the U.K. and the second largest in
As announced in March, Aberdeen Chief Executive Officer
Martin Gilbert and Standard Life CEO Keith Skeoch will serve as
co-CEOs, with Gilbert taking on external responsibilities such
as marketing and client engagement, and Skeoch accountable for
the day-to-day operations. Grimstone said in Tuesdays
regulatory filing that he was confident the pair
would work well together.
The new board will be equally split between current Aberdeen
and Standard Life directors.
Shareholders are set to vote on the terms of the merger in
June, and the deal should be completed by the fall, according
to Tuesday's documents.