Aberdeen's chief executive Martin Gilbert decried as "grossly exaggerated" certain weekend press reports that suggested the firms' combined headcount of around 9,000, mostly based between Edinburgh and London but with smaller outposts in scores of countries globally, would be whittled down by up to 1,000 employees and instead played up the cost efficiencies resulting from technical and operating platform rationalization.
Investors reacted positively to the deal with shares in both companies opening higher in European morning trade. Standard Life shares shot up by more than 9 percent fresh out of the gates but had retreated slightly to closer to 6 percent by midday U.K. time. Meanwhile, Aberdeen shares fell back to just short of 5 percent higher from an initial move of close to 7 percent.
Given the strong strategic rationale, broad investor, management and analyst enthusiasm for the deal seems warranted.
Facing continued pressure from the ongoing industry-wide shift of assets from active into low-cost passive management, growing regulatory pressure on a global scale but also specifically within the U.K. where the national regulator is midway through an inquiry into profitability levels at fund managers, the two firms' move to unite has a sound defensive ring to it.
However, the management teams are also justified in pointing to the deal's offensive benefits such as the ability for both sides to leverage each other's distribution networks – this being a particular boon for Aberdeen investors given Standard Life's strong retail access channels – and create a more comprehensive product platform.
The announcement follows a detailed leak on Saturday and the subsequent joint confirmation of advanced talks rushed out by advisors later that day, with Standard Life chief executive officer Keith Skeoch telling reporters on a call shortly after the release of the news on Monday that serious talks have been underway since January.
The combined company will be two-thirds owned by Standard Life's shareholders, however, management positions would be more evenly split with Skeoch and his counterpart at Aberdeen jointly taking the helm.
City grandee Gerry Grimstone, Standard Life chairman for nearly a decade, will retain that position at the new company with Aberdeen's Simon Troughton assuming the deputy chairman role.
The combination has been organized as a scheme of arrangement, a type of structure that requires approval from 75 percent of those holding voting shares as opposed to the 50 percent threshold needed for a takeover offer. Generally, a scheme of arrangement is only pursued when the acquirer is confident of the support of a target's management and shareholders.
Aberdeen's two largest shareholders, Mitsubishi UFJ Trust and Banking Corporation, which owns around 17 percent and Lloyds Banking Group, which owns over 9 percent, have both given their non-binding support to the deal.