Statement regarding the potential merger of Standard Life plc (“Standard Life”) and Aberdeen Asset Management PLC (“Aberdeen”)
Further to the recent press speculation the Boards of Standard Life and Aberdeen confirm that they are in discussions in relation to a possible all-share merger of Standard Life and Aberdeen (the “Potential Merger” to form the “Combined Group”).
Under the terms of the Potential Merger, Aberdeen shareholders would own 33.3 per cent and Standard Life shareholders would own 66.7 per cent of the Combined Group.
Compelling Strategic and Financial Rationale
Standard Life and Aberdeen’s long-term success has been built through differentiated, but complementary, strategies that have delivered attractive growth and returns for clients and shareholders. The Potential Merger represents an excellent opportunity to leverage Standard Life and Aberdeen’s combined strengths to create a world class investment company.
It is expected that the Potential Merger would:
- Harness Standard Life and Aberdeen’s complementary, market leading investment and savings capabilities which would deliver a compelling and comprehensive product offering for clients covering developed and emerging market equities and fixed income, multi-asset, real estate and alternatives.
- Establish one of the largest and most sophisticated investment solutions offerings globally, positioning the Combined Group to meet the evolving needs of clients.
- Reinforce both Standard Life and Aberdeen’s long-standing commitment to active management, underpinned by fundamental research, with both global reach and local depth of resources.
- Create an investment group with strong brands, leading institutional and wholesale distribution franchises, market leading platforms and access to long-standing, strategic partnerships globally.
- Bring scale, as one of the largest active investment managers globally with £660bn of proforma assets under administration and financial strength, transforming the Combined Group’s ability to invest for growth, innovate and drive greater operational efficiency.
- Deliver through increased diversification an enhanced revenue, cash flow and earnings profile and strong balance sheet that is expected to be capable of generating attractive and sustainable returns for shareholders, including dividends.
- Result in material earnings accretion for both sets of shareholders, reflecting the significant synergy potential of a combination.
Governance and Management
Standard Life Chairman Sir Gerry Grimstone would become Chairman of the Board of the Combined Group, with Aberdeen’s Chairman Simon Troughton becoming Deputy Chairman.
Keith Skeoch, CEO of Standard Life and Martin Gilbert, CEO of Aberdeen, would become co-CEOs of the Combined Group. In addition, Bill Rattray of Aberdeen and Rod Paris of Standard Life would become CFO and CIO respectively.
It is envisaged that the Board of Directors of the Combined Group would comprise equal numbers of Standard Life and Aberdeen directors.
The Combined Group would draw on the expertise across its markets and would endeavour to harness the talent in both companies to optimise the benefits for clients and shareholders of the Combined Group.
The Potential Merger is expected to be effected by means of a court sanctioned Scheme of Arrangement of Aberdeen.
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 between the parties remain ongoing regarding the other terms and conditions of the Potential Merger.
The formal announcement of the Potential Merger remains conditional on, inter alia, agreement on the other terms and conditions of the Potential Merger, satisfactory completion of mutual due diligence and the approval of the Boards of Standard Life and Aberdeen. Each of Standard Life and Aberdeen reserves the right to waive in whole or in part any of the pre-conditions to making an offer set out in this announcement.
Completion of the Potential Merger will be subject to shareholder approvals and receipt, on satisfactory terms, of regulatory and merger control approvals as appropriate, as well as other customary conditions.
Standard Life, with the agreement of Aberdeen, reserves the right, to:
(A) Introduce other forms of consideration and/or vary the mix of consideration of any offer;
(B) Vary the terms of the transaction; and
(C) Adjust the terms of the transaction to take account of any dividend announced, declared, made or paid by either party.
There can be no certainty that any transaction will occur nor as to the terms on which any transaction may occur.
In accordance with Rule 2.6(a) of the Code, Standard Life must, by not later than 5.00 p.m. on 1 April 2017, either announce a firm intention to make an offer for Aberdeen in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.
This announcement has been made with the consent of Standard Life.
The full statement and further information can be found at the Standard Life website.