Two chiefs are no fudge, says boss in Aberdeen merger

ABERDEEN Asset Management and Standard Life will try to quell fears of a leadership fudge this week, setting out how its joint bosses will work together when the two groups merge. Aberdeen chief executive Martin Gilbert said last week that he and Standard Life’s head Keith Skeoch would share the same job title while taking charge of separate roles.

He told The Mail on Sunday: ‘I will concentrate on external matters and Keith will run the fabric of the business.’

The two chiefs know each other well, but are seen as very different personalities. Skeoch is seen as a private and thoughtful character, while Gilbert is outspoken and gregarious.

Analysts in the City had been critical of the joint leadership proposal. The companies plan to release a statement this week to detail how they believe the unusual arrangement will work in practice after the £11 billion merger. The merged group will manage about £660billion on behalf of more than five million customers.

The two Scottish fund managers had been challenged by investors to explain how Gilbert and Skeoch could be in joint control of the merged company.

Eamonn Flanagan, an analyst at broker Shore Capital, said: ‘To us a single chief executive calling the shots and retaining overall responsibility is critical in all such transactions.’

The terms of the merger mean Standard Life shareholders will get two-thirds of the shares in the new group. Some are suggesting this indicates the deal is a takeover by Standard Life.

Gilbert said the merged business was likely to be based in Edinburgh – where Standard Life has its headquarters – rather than in Aberdeen.

He said: ‘Aberdeen Asset Management has more staff in Edinburgh than i n Aberdeen anyway. I suspect we will be in Edinburgh.’

Discussions are continuing to decide on a name for the new business. The fund management arm is likely to be known as Aberdeen Standard Asset Management.

The groups both expect the word ‘Aberdeen’ to be included in the holding company’s name.

The two fund managers are aiming to find combined annual cost savings of £200 million, but Gilbert played down fears that the merger would result in 1,000 job losses.

‘That was exaggerated,’ he said. ‘This isn’t about job losses. It’s about creating a world-class investment company.’

Gilbert said staff would find out what was likely to happen to their jobs in the next four months.

The deal has already seen the departure of highly regarded Standard Life head of equities David Cumming, who unexpectedly quit last week.