Aberdeen has sealed the deal on its £550 million acquisition of Scottish Widows Investment Partnership.
‘This transaction is significant for the long-term prospects of Aberdeen in a number of ways,’ said Martin Gilbert (pictured), Aberdeen chief executive.
‘We are confident that this transaction will deliver considerable additional value to our expanded client base and this will therefore benefit our shareholders.’
At 8.30, shares in the business were up more than 12% at 480p.
The purchase will be funded by the issue of 131.8 million new shares to Swip owner Lloyds, equivalent to 9.9% of current market cap, in addition to a £100 million payment conditional on five-year performance.
'I am delighted to welcome Lloyds as a major shareholder in the Aberdeen group and we look forward to working with them to deliver value through this new strategic relationship,’ added Gilbert.
The deal will add £136 billion to Aberdeen’s client assets. 'This deal provides a welcome diversification of Aberdeen’s product portfolio away from traditional equity funds and into quant, passive, fixed income and property strategies,' said Jonathan Gosling of equity analyst Edison Research.
'It will be underpinned by a series of distribution agreements and strategic initiatives across the Lloyd's business.'
Alongside the purchase, Aberdeen also released full year results for the 12 months to 30 September, showing underlying profit before tax up 39% to £482.7 million.
Net revenue rose 24% to £1.07 billion. The company will pay a final dividend of 10p, increasing its full-year dividend by 39% to 16p.
Net cash on its balance sheet rose 60% to £426 million, while assets under management rose 7% to £200 billion.
‘Whilst there are encouraging signs of recovery in certain economies around the world, including the UK, the investment environment is likely to remain difficult as structural imbalances remain unresolved,’ added Gilbert.
‘Against this backdrop our fund management teams will continue to focus on fundamental research to identify opportunities for our clients.’