Rathbones has agreed an £839m deal to acquire Investec Wealth & Investment UK in a move that will create a discretionary wealth manager with £100bn in funds under management and administration.
The enlarged wealth manager will operate under the Rathbones brand. The deal does not include the Switzerland-based Investec Bank or Investec Wealth & Investment International.
In a statement to the stock exchange, the boards of both companies said the deal will bring scale and technology benefits, with the new entity targeting £60m in pre-tax cost savings per year.
Under the terms of the agreement, Rathbones will issue shares in exchange for 100% of Investec W&I’s UK share capital. Upon completion, Investec Group will own 41.25% of the enlarged Rathbones Group, with 29.9% voting rights.
Clive Bannister (pictured), chair of Rathbones, said: “This transaction not only presents a compelling strategic and financial rationale, but also accelerates Rathbones’ growth strategy. Operating at scale allows the group to offer an even more attractive proposition to clients and colleagues, supporting future growth and creating significant value for Rathbones’ shareholders. I look forward to Investec W&I UK colleagues joining the enlarged Rathbones Group, and welcome Investec Group as a strategic shareholder. I am hugely excited about what the combination can deliver.”
Fani Titi, Investec group chief executive, said: “The combination of Investec W&I UK and Rathbones brings together two businesses which have a long-standing heritage in UK wealth management and closely aligned cultures. The strategic fit of the two businesses is compelling with complementary strengths and capabilities to enhance the overall proposition for clients.
“This will be supported by the strategic partnership which offers attractive growth and collaboration opportunities for both groups. The transaction represents a real step-change and long-term opportunity for our UK wealth strategy, underscores our commitment to the UK wealth management market and enhances our UK business as a whole.”
Iain Hooley, chief executive of Investec W&I UK, added: “We are excited to be combining with Rathbones, a business with a similar heritage, common vision and a shared culture. As a combined business, we will have true scale, an enhanced client proposition, and complementary multi-channel distribution capability.
“The long-term, structural growth opportunity in the UK wealth industry is compelling and together we will be well placed to capitalise on it. We look forward to working with the Rathbones management team to complete the transaction and bring the two organisations together.”