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Standard Life and Aberdeen Asset Management have agreed on the terms to create the UK’s largest asset manager.

Following reports of an £11bn takeover over the weekend, the two companies said they would recommend an all-share deal to shareholders, completing the transformation of Standard Life’s business from a traditional insurer into an investment powerhouse.

Standard Life said on Monday the combined group’s new name would incorporate both its name and that of Aberdeen’s and be headquartered in Scotland. Its two chief executives – Martin Gilbert from Aberdeen and Keith Skeoch from Standard Life – will be co-bosses of the new group.

The deal would create Europe’s second largest fund manager with £660bn in assets under management.

The merger values each Aberdeen share at 286.5p with the fund’s shareholders owning 33.3 per cent of the newly merged group and Standard Life investors owning the remaining 66.7 per cent.

Martin Gilbert, chief executive of Aberdeen, told BBC Radio Four there would be “some job losses” from the deal but he did not reveal details of the scale. He described the figure of 1,000 job cuts as “way way exaggerated” but said overall savings would be around £200m for Aberdeen.

Mr Gilbert added:

We don’t know the number of job losses. In the world of asset management you have to be either big or small. This makes us bigger which makes us better for our clients and provide a much better service for them.

Keith Skeoch, chief executive of Standard Life, said in a statement:

The combination of our businesses will create a formidable player in the active asset management industry globally.

We strongly believe that we can build on the strength of the existing Standard Life business by combining with Aberdeen to create one of the largest active investment managers in the world and deliver significant value for all of our stakeholders.

Gerry Grimstone, current chairman of Standard Life, will become head of the new group’s board, while Aberdeen chairman Simon Troughton will take on the role of deputy chairman.

Both companies said they had received “non-binding statements of support” for the merger from shareholders MUTB and Lloyds.

Mr Gilbert added in a statement:

We believe this merger is excellent for our clients, bringing together the strong and highly complementary investment capabilities of each firm with a breadth and depth of talent unrivalled amongst UK active managers and positioning the business to meet the evolving needs of clients and customers.

This merger brings financial strength, diversity of customer base and global reach to ensure that the enlarged business can compete effectively on the global stage.

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