Competition body approves Standard Life deal with AAM

● Competition and Markets Authority ends inqiury into transaction at Phase 1

The competition watchdog has waved through the proposed £11 billion merger of Standard Life and Aberdeen Asset Management (AAM) that will create a top 20 global fund manager.

The Competition and Markets Authority (CMA) said yesterday that it had decided not to refer the merger to an indepth “Phase 2 investigation”, paving the way for the deal’s completion in August.

A regulatory green light follows shareholders in both Edinburgh-based Standard Life and AAM voting overwhelmingly in favour of the merger last Monday.

More than 98 per cent of Standard shareholders and 95 percentofaaminvestorsgave backing to the deal, the former at a meeting in the Assembly Rooms in Edinburgh and the latter at the Aberdeen fund manager’s London offices.

The swiftness of the “Phase 1” clearance by the CMA sugit gests the regulator felt there were minimal competition issues linked to the merger, the investigation and invitation for parties to comment only being launched on 22 May.

It creates a global fund manager with £670 billion of assets. One fund management analyst commented: “The CMA decision was expected, there were never likely to be major competition issues.”

Unusually, the enlarged company, to be called Standard Life Aberdeen, will be headed up jointly by Standard chief executive Keith Skeoch and his counterpart at AAM, Martin Gilbert.

Announced in March, the merger is targeting cost savings of £200 million a year, with around 800 jobs expected to be lost over a three-year period from a global workforce of 9,000.

Standard Life and AAM issued a joint statement yesterday noting the CMA’S announcement that it “has completed its review of their proposed merger and has cleared the transaction unconditionally”.

added: “The transaction is currently expected to complete on 14 August, 2017, subject to remaining regulatory approvals.”

The deal, one of the biggest ever between two major Scottish financial services businesses, also needs approval from the Financial Conduct Authority, and the Prudential Regulation Authority. The former polices financial markets and promotes competition in the sector, and the latter monitors the financial strength of individual banks, insurers and fund managers.

In addition, the merger is subject to inquiries by a handful of overseas regulators. Sources familiar with the situation said yesterday that these further regulatory approvals are expected by the end of July.

At Monday’s EGM, Sir Gerry Grimstone, chairman of the near-200-year-old Standard Life, which has 1.2 million shareholders following its demutualisation, said after the vote that it was a “very exciting moment” for the company.

He said there would be “no confusion as to who does what” in the joint chief executive structure.