Raft of merger announcements reveal scale of job cuts and outflows from GARS
Standard Life and Aberdeen Asset Management expect to cut 800 jobs – almost 10 per cent of their combined workforce of 9,000 – in the three-years following their proposed merger.
Some of the job losses will come from “natural turnover”, the companies said, as they look to “minimise the number of compulsory redundancies” that take place.
While the companies are expecting to save £200m a year once the merger is complete, the cost of integrating will set them back around £320m up-front.
In prospectus documents released last night, Aberdeen and Standard Life say they will look to combine premises where both organisations already operate from multiple locations near each other.
The merged business will be renamed Standard Life Aberdeen and will operate under branding drawn from both the Standard Life Group and the Aberdeen Group.
It is expected that the combined group will be reorganised to bring Aberdeen and Standard’s investment functions together into a single investment group that will be given the interim name Aberdeen Standard Life Investments Limited, pending a review of the global brand strategy.
The combined group will be headquartered in Scotland and continue to have offices around the world.
New leaders, new flows
Standard Life chairman Gerry Grimstone will head the board of the new entity, with Standard Life and Aberdeen chief executives Keith Skeoch and Martin Gilbert to become co-chief executives.
In a trading update Standard said it had seen net investment inflows of £3.1bn in the first quarter of 2017, excluding its Global Absolute Return Strategies (GARS) which saw outflows of £2.8bn.
Workplace net inflows stood at £400m.
Standard Life chief executive Keith Skeoch says: “We have made further progress in the first three months of 2017 with inflows from our growth channels, including notable growth in flows in our pensions and savings business. This has been supported by strong investment performance over the short and long-term.
“We continue to benefit from diversifying our sources of assets, and this strategy will be further enhanced by our proposed merger with Aberdeen. Standard Life remains confident about capitalising on industry trends, to meet the evolving needs of our clients and customers and to create long-term value for Standard Life shareholders.”