REPORTS: Standard Life plc and Aberdeen Asset Management PLC

8 years ago - Published by Aberdeen in Expert opinion, Lifestyle

Recommended All-Share Merger
of
Standard Life plc and Aberdeen Asset Management PLC

 

The Boards of Standard Life plc (“Standard Life”) and Aberdeen Asset Management PLC (“Aberdeen”) are pleased to announce that they have reached agreement on the terms of a recommended all-share merger of Standard Life and Aberdeen, to be effected by means of a court-sanctioned scheme of arrangement between Aberdeen and the Aberdeen Shareholders under Part 26 of the Companies Act 2006 (the “Merger”). The Combined Group will in due course be branded to incorporate the names of both Standard Life and Aberdeen.

Under the terms of the Merger, holders of Aberdeen Shares will be entitled to receive:

0.757 New Shares in exchange for each Aberdeen Share

Based on this exchange ratio (the “Exchange Ratio”) and the Closing Price of 378.5 pence per Standard Life Share on 3 March 2017 (being the last Business Day prior to the date of this Announcement), the Merger values each Aberdeen Share at 286.5 pence and Aberdeen’s existing issued ordinary share capital at approximately £3.8 billion.
Following completion of the Merger, Aberdeen Shareholders would own approximately 33.3 per cent. and Standard Life 
Shareholders would own approximately 66.7 per cent. of the Combined Group on a diluted basis.

Compelling Strategic and Financial Rationale

The Merger has a compelling strategic and financial rationale through combining Standard Life’s and Aberdeen’s complementary strengths to create a world class investment group. 
The Boards of Standard Life and Aberdeen believe that the Merger will:

· Harness Standard Life’s 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.
· Reinforce both Standard Life’s and Aberdeen’s long-standing commitment to active management, underpinned by fundamental research, with both global reach and local depth of resources.
· Establish one of the largest and most sophisticated investment solutions offerings globally, positioning the Combined Group to meet the evolving needs of clients. 
· 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 £660 billion of pro forma 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 the Merger.

The Combined Group

The Combined Group will be headquartered in Scotland.
The Combined Group will draw on its broad expertise and harness the talent in both companies to optimise the benefits for clients and shareholders.

Following completion of the Merger:

· Sir Gerry Grimstone, Chairman of Standard Life, will become Chairman of the Board of the Combined Group, with Simon Troughton, Chairman of Aberdeen, becoming Deputy Chairman.
· Keith Skeoch, CEO of Standard Life, and Martin Gilbert, CEO of Aberdeen, will become co-CEOs of the Combined Group. 
· Bill Rattray, of Aberdeen, and Rod Paris, of Standard Life, will become CFO and CIO respectively. 
· It is envisaged that the Board of the Combined Group will comprise equal numbers of Standard Life and Aberdeen directors.
· Standard Life and Aberdeen have agreed that the Combined Group will include, and operate under, branding drawn from both the Standard Life Group and the Aberdeen Group.

Under the terms of the Merger, Standard Life and Aberdeen have agreed that:

· Standard Life Shareholders will be entitled to receive the proposed final dividend of 13.35 pence per Standard Life Share for the six month period ended 31 December 2016, scheduled to be paid on 23 May 2017 (subject to approval at the Standard Life Annual General Meeting); and 
· Aberdeen Shareholders will be entitled to receive an interim dividend of up to 7.5 pence for the six month period ended 31 March 2017, scheduled to be paid in June 2017 (subject to approval by the Board of Aberdeen).