LONDON — Shares in both Standard Life and Aberdeen Asset Management are popping on Monday after news that the two companies have agreed to a merger worth around £11 billion ($US13.4 billion).
Standard Life said in at statement on Monday morning that both groups would recommend an all-share deal to shareholders, with the deal creating Europe’s second largest fund manager with £660 billion in assets under management (AuM).
News of the deal, which first came to light over the weekend, has sent shares in both firms skywards, with early gains of as much as 9%, before a moderation from investors in both companies.
Just before 9.00 a.m. GMT (4.00 a.m. ET) shares in Aberdeen Asset Management are up 4.6%, while Standard Life is seeing gains of around 6.3%.
Here is how things look for both firms look:
Despite big gains for the two companies, general market sentiment is subdued on Monday, with geopolitical concerns rattling traders and investors. Overnight Japan’s Nikkei fell after North Korea fired four missiles, three of which landed in Japan’s exclusive economic zone.
“Geopolitics remains to the fore with North Korean sabre-rattling, China trimming its GDP growth estimate, Trump accusing Obama of pre-election wiretapping and Fillon refusing to throw in the towel to keep the French Presidential election nice and entertaining,” Accendo Markets Head of Research Mike van Dulken wrote a little earlier.
The downside sentiment has carried over into Europe, and after an hour of trading, all major European bourses are in negative territory. German stocks are also being dragged by a bad day for Deutsche Bank after it announced plans for an €8 billion capital raise.
Here is the scoreboard: