F&C is set to become one of the UK's biggest fund groups with £120bn under management in a merger with Isis Asset Management in a deal worth £750m.
In what is essentially a reverse takeover, Friends Provident, which is the majority shareholder in Isis, will issue 331 million new Isis shares in exchange for F&C, giving the insurer a 51 per cent stake in the new group. F&C's parent, Dutch holding company Eureko, which had been preparing a listing for its asset management subsidiary, will own 23 per cent. The remainder will be a free float.
The deal means the expensively promoted Isis brand will be scrapped and replaced by F&C, with F&C management taking most of the senior positions in the merged group. Isis chief executive Howard Carter will be chief executive of the new operation but Isis chief investment officer Robert Talbut and head of fixed income Andrew Tunks will be replaced by their counterparts at F&C Tony Broccado and Helene Williamson respectively.
Isis says the deal is expected to save the new group £33m a year by 2006 and is based on a common vision and complementary corporate fit.
Much of Isis' business is in the UK retail open-ended market while F&C, which has a strong foothold in Europe, specialises in investment trusts and institutional business.
Carter says: “This is a unique opportunity for us to achieve our stated objective of becoming a top five UK asset manager, extend our franchise into continental Europe, create a more diversified business and provide a platform for meeting our clients' needs in terms of investment management capability.”
F&C chief executive and proposed non-executive chairman of the new group Robert Jenkins says: “This transaction achieves our aim of a listing for F&C, creates value, deepens our investment talent and does so in a way which will be non-disruptive to our clients.”
Friends Provident becomes the first life company to launch an ethical investment fund, branded Stewardship.The range is eventually expanded and adopts the Isis brand 1998
Friends Provident acquires Ivory & Sime, enabling the enlarged fund group to list on the London Stock Exchange.
Friends Provident rebrands its fund arm Friends Ivory & Sime as Isis Asset Management following its acquisition of Royal & Sun Alliance Investment Management earlier in the year. The move boosts the group's funds under management to £70bn and elevates it into the top 10 UK fund groups.
Isis Asset Management merges with F&C in deal worth £750m to create the fourth-biggest fund group in the UK,with a total of £120bn under management