Software giant Misys is poised to scoop up IFA networks Financial Options and Kestrel for around £55m.
Money Marketing can reveal top level talks are at an advanced stage between Financial Options Group and Misys, which already owns the 900 member firm Countrywide, to create the UK's biggest IFA.
Teams from the software giant have completed due diligence, and the deal is expected to be unveiled before the Options annual conference takes place in Birmingham on September 10.
While Financial Options and Kestrel will retain their identities and members, the deal will create a super firm of IFAs with more than 1,600 member firms and more than 3,600 registered individuals.
Countrywide along with 200-member Kestrel and 500-member Financial Options, will together outstrip DBS, currently the UK's biggest network, by more than 1,200 RIs.
Misys will gain from increased distribution of its software among Fog members in addition to any profits the giant IFA will make.
Shareholders with substantial stakes in Fog, including chairman Mark Blake, joint managing directors Michael Blake and Ron Leith, and finance director Kevin Budge, are all set to receive significant sums from the deal.
Misys this month announced it has a £50m war chest to branch into financial services over the internet.
It threw down the gauntlet to smaller on-line rival The Exchange, which recently floated.
It is understood that Misys has approached a number of networks since the beginning of the year with a view to making an acquisition, including IFA Network and Berkeley Independent.
Sources do not rule out further network acquisitions by the software giant.
A source says: "Informal chats have been under way since the end of last year. Misys are aiming to be number one. This deal takes them to number one. They will be bigger than DBS."
Countrywide sales and marketing director Max Wright says: "There will always be rumours on acquisitions and we do not comment on rumours."
Leith refused to deny that the deal is taking place.