Scotland's Aberdeen Asset Management and Standard Life are mulling an £11bn merger

 
Courtney Goldsmith
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The two Scottish firms are said to be in talks of a merger (Source: Getty)

Two of Britain's top fund managers are in talks about one of the most significant mergers in the City for years, it has been confirmed.

Aberdeen Asset Management and Standard Life have been holding talks about a merger which could valued at £11bn, Sky News first reported.

The Scotland-based companies employ more than 9,000 people and would have £600bn worth of combined assets. As two of Scotland's biggest firms, the deal will attract close scrutiny.

Terms of the deal are still being negotiated and Aberdeen is also said to be looking at a number of transactions in the US, including the purchase of Pioneer Investments' US business, according to City insiders.

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The firms said a combined company would be run jointly by Martin Gilbert and Keith Skeoch, the chief executives of Aberdeen and Standard Life, respectively. Standard Life chairman Sir Gerry Grimstone would take up the same role at the combined group while Aberdeen's chairman Simon Troughton would become deputy chairman.

A source suggested to Sky job losses could be a consequence of the deal as the firms mull a prospective annual cost savings figure of £200m.

Both Aberdeen and Standard Life have seen hardships over recent months.

Aberdeen's fund outflows have grown while investor sentiment towards emerging markets declines. Last month it reported its 15 straight quarter of outflows.

Standard Life hasn't been able to improve the performance of its so-called absolute return fund, which aims to make money for investors in all market conditions.

The two firms confirmed talks of a possible all-share merger on Saturday evening. It would give Aberdeen shareholders a 33.3 per cent stake in the combined group and Standard Life shareholders a 66.7 per cent stake.

Read more: Standard Life shares tumble despite results coming in ahead of expectations

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