Standard Life Aberdeen Plans to Cut 800 Jobs After Merger

(Bloomberg) -- Standard Life Plc’s 3.8 billion-pound ($4.9 billion) merger with Aberdeen Asset Management Plc will see 800 jobs cut from the combined group within three years of the tie-up.

Standard Life Aberdeen Plc, as the new company will be known, reiterated that it expects annual cost savings of about 200 million pounds by the end of the third year following the merger, according to the deal’s prospectus published on Tuesday. Standard Life and Aberdeen had a total of about 9,000 employees as of Dec. 31. The new company will be based in Scotland and have offices across the world.

The stock of both companies has rebounded from the lows set in March as investors warm to the all-share transaction that will see Standard Life shareholders own 66.7 percent of the combined firm. The deal is part of a wave of consolidation in the industry as active managers fight to preserve market share from cheaper passive funds.

The companies also announced the composition of the new board, which will include Chairman Gerry Grimstone and co-CEOs Martin Gilbert and Keith Skeoch and be made up of 12 men and four women. The new company is scheduled to start trading on the London Stock Exchange on Aug. 14.

Standard Life said in a separate statement that its investment unit saw “encouraging” inflows in the first quarter, despite clients pulling 2.8 billion pounds from its flagship Global Absolute Return Strategies fund.

Lloyds Banking Group Plc has agreed to give at least 12 months’ notice if it decides at a future date to pull the money that Aberdeen manages on behalf of its insurance unit, according to the prospectus. The merger puts the two companies in competition with Lloyds’ Scottish Widows insurance unit, some of whose assets are managed by Aberdeen.

Aberdeen last week reported a slowdown in outflows as investors returned to its emerging-market strategies, boosting profitability. Even so, clients still pulled a net 13.4 billion pounds from its funds in the six months through March.

To contact the reporters on this story: Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net, Sarah Jones in London at sjones35@bloomberg.net.

To contact the editors responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Andrew Blackman