Jobs cull fear in £11bn funds mega-merger

the boss of aberdeen asset Management has warned that hundreds of jobs could be lost following its £3.8bn takeover by rival Standard life.

the two companies have agreed to join forces and create one of the largest fund managers in the world, with £660bn of savers’ cash on its books and 9,000 staff.

Bosses expect to make cost savings of £200m a year – sparking fears of job losses at a combined group that would be worth between £11bn and £12bn.

‘there will be some job losses where there is overlap,’ said Martin Gilbert, chief executive and founder of aberdeen. But he dismissed suggestions that as many as 1,000 jobs could go.

‘We don’t know the number of job losses. I don’t know where that figure has come from. that is way, way exaggerated,’ he said.

aberdeen currently has 2,700 employees while Standard life has 6,300.

Shares in both companies rose yesterday as investors welcomed the plans to merge in a deal that would give Standard life shareholders a 66.7pc stake in the combined group and aberdeen shareholders 33.3pc.

there was also speculation that another bidder could enter the fray.

aberdeen rose 4.2pc, or 11.9p, to 298.3p while Standard life was up 5.7pc, or 21.5p, to 400p.

‘there must be a reasonable likelihood of a counter-bid,’ said Ben Cohen of Canaccord Genuity.

rivals also saw their shares rise – with ashmore up 1.7pc, or 6p, to 365.9p, and Jupiter 2.4pc higher, or 10.2p, at 433.2p – as investors bet on further deals in the sector.

the agreement between aberdeen and Standard life follows deals involving henderson and Janus, amundi and Pioneer, and Fortress and Softbank in recent months. Fund managers are under pressure over the fees they charge their clients, poor performance and competition from cheaper alternatives such as index-linked funds.

Mike Clements, head of european equities at SYZ asset Management, said: ‘We think sector consolidation has some way to play out.’

Gilbert and Standard life chief executive Keith Skeoch defended their decision to share the top job in the combined group amid con- cerns it will end in disaster. Gilbert said: ‘ Keith comes from an economic background. I’m from the financial side. there’s more than enough for both of us to do.’

But eamonn Flanagan, an analyst at Shore Capital, said he had ‘grave concerns’ about the powersharing arrangement.

alan Miller, of SCM Private, said: ‘ this is a combination of two unsuccessful companies.’