British financial services group Standard Life has agreed to buy Aberdeen Asset Management for £3.8 billion to create one of the world's biggest fund managers, the pair said Monday.
The deal, worth $4.7 billion or 4.4 billion euros, was presented as a merger but Standard Life shareholders will have overall control with a 66.7-percent stake in the new firm, according to a joint statement. Aberdeen will hold the rest.
The combined business will have a stock market capitalisation of £11 billion and oversee assets worth £660 billion - making it one of the largest investment managers in the world and the biggest in Britain.
The news sent Standard Life's share price more than seven percent higher in early morning London trade, while Aberdeen stock gained almost six percent.
"The boards of Standard Life plc and Aberdeen Asset Management plc are pleased to announce that they have reached agreement on the terms of a recommended all-share merger," said the statement.
The transaction "has a compelling strategic and financial rationale through combining Standard Life's and Aberdeen's complementary strengths to create a world class investment group".
They added the deal would "harness Standard Life's and Aberdeen's complementary, market leading investment and savings capabilities".