Watchdog probes Standard Life-Aberdeen Asset deal

Competition watchdogs have launched a review to look at whether Standard Life's planned £11 billion merger deal with Aberdeen Asset Management (AAM) could hit competition in the UK financial services market.

The Competition & Markets Authority is looking into Standard Life's tie-up with Aberdeen Asset Management. Picture: Lisa Ferguson
The Competition & Markets Authority is looking into Standard Life's tie-up with Aberdeen Asset Management. Picture: Lisa Ferguson

The planned deal would create one of the world’s industry powerhouses, overseeing £660bn worth of global assets and be in the top 25 largest fund groups globally.

Sign up to our daily newsletter

The Competition & Markets Authority (CMA) said it was considering whether the tie-up may be expected to result in a “substantial lessening of competition”.

The watchdog has invited comments on the transaction from any interested party to be submitted by 6 June with an expected decision date on whether to launch a fuller inquiry of 18 July.

Standard Life stressed the step was a “routine and expected part of the merger process”.

It said: “Standard Life filed an application with the CMA in respect of the proposed merger with Aberdeen Asset Management. This has triggered the CMA’s standard phase 1 review of this application. This is one of a number of regulatory approvals being sought as part of the merger process.”

The firm also pointed out that approval for the merger has already been granted by competition authorities in the US and Germany.

Earlier this month it was revealed that the merger is expected to result in the loss of about 800 jobs. The posts are due to be cut over three years across the companies.

Edinburgh-based Standard Life employs about 6,300 people and AAM has some 2,700 staff. The companies said they expect “natural turnover” to account for some of the reductions, while other steps will be taken to minimise compulsory redundancies.

The merger of Edinburgh-based Standard Life and AAM is aimed at creating cost savings that could add up to £200 million a year.

Standard Life chairman Sir Gerry Grimstone will be the chairman of Standard Life Aberdeen while AAM’s chairman Simon Troughton will become deputy chairman. Keith Skeoch, Standard Life chief executive, and AAM boss Martin Gilbert will become co-chief executives of the new firm, to be called Standard Life Aberdeen.

The two companies agreed the terms of the merger in March. Under the terms of the deal, AAM shareholders would own 33.3 per cent and Standard Life shareholders would own 66.7 of cent of the combined group.

A general meeting has been scheduled for 19 June at which shareholders will be asked to approve the merger. If backed, the deal is expected to be closed by mid-August.

In a letter to shareholders, Grimstone said: “This merger would bring together two fine companies and I’m greatly honoured to be asked to chair the combination. We will be successful as long as we continue to put our clients, customers, employees and good governance at the heart of what we do.”