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Aberdeen acquires GBP40bn Credit Suisse asset management business

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Aberdeen Asset Management has agreed to acquire Credit Suisse’s fixed-income, money-market and equity asset management business in Europe, Asia and Australasia, subject to shareholder and

Aberdeen Asset Management has agreed to acquire Credit Suisse’s fixed-income, money-market and equity asset management business in Europe, Asia and Australasia, subject to shareholder and regulatory approval.

Credit Suisse will receive up to 240 million new ordinary shares in Aberdeen, equivalent to 24.97 per cent of the enlarged group’s issued ordinary share capital, valued at GBP250m based on the Aberdeen closing share price of 104.25 pence on December 30.

The assets under management of the businesses being acquired by Aberdeen stood at CHF75 billion (GBP40 billion) as of November 30, with associated current annual run-rate revenues of approximately CHF220 million (GBP118 million).

The issue of the full number of shares to Credit Suisse will depend on this level of run-rate revenues being maintained up to the closing of the acquisition, which is expected to take place around June 30.

The Credit Suisse asset management business offers a broad product range covering predominantly fixed-income, money-market and equity investment, sold primarily to third party clients, although a significant minority of assets are sourced through Credit Suisse’s private banking division.

Through the deal, Aberdeen will greater access to the banking network of Credit Suisse through an extension of the existing distribution agreement between the two groups.

Aberdeen says the acquisition will give it greater scale in markets where it already has a presence, such as the UK, Australia, Germany, Switzerland and Japan, and strengthen its offering in certain product areas. Aberdeen had GBP111.1bn in assets under management at the end of September.

The deal will bring in another significant shareholder alongside hedge fund manager Toscafund Asset Management, which currently holds 24.74 per cent of Aberdeen’s outstanding ordinary shares, and strengthen the company’s balance sheet by the issue of new shares and a reduction in relative gearing as the acquired business is debt-free.

‘The acquisition confirms Aberdeen’s position as a leading global asset manager and provides us with greater access to the distribution network of Credit Suisse and its private banking division, one of the world’s largest wealth managers,’ says chief executive Martin Gilbert (photo).

‘This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies, complementing our organic growth.

‘Given our proven track record of integrating businesses, we are well placed to ensure a smooth transition of the Credit Suisse assets to Aberdeen. We believe that this transaction will be for the long-term benefit of all our shareholders.’

Rob Shafir, chief executive of Credit Suisse’s asset management division, says: ‘We believe this transaction offers our clients a compelling opportunity, providing them with access to an enhanced suite of investment products provided by a premier manager that historically has had strong performance across many asset classes.

‘It also enables us to maximise the value of our Global Investors business, as we announced we would do earlier this year, and benefit from our new partner’s advantages of scale in a consolidating marketplace.’

Toscafund chief executive Martin Hughes adds: ‘Toscafund has already confirmed its support for this transformational acquisition, which has been made possible by the excellent operating platform offered by Aberdeen. Toscafund believes that the transaction is of clear benefit to the clients and shareholders of Aberdeen Asset Management and Credit Suisse.’

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