Asset management companies have been grappling with investors’ increasing preference for passive funds, which are less costly. On March 6, 2017, in a move shaking up Scotland’s financial services sector, Standard Life Plc. and Aberdeen Asset Management Plc. created the second-largest fund manager in Europe with an 11 billion pound ($14.7 billion) merger.
The companies estimated the move would realize about £200 million pounds in cost savings within three years. Operating under the name Standard Life Aberdeen (ABDN), the newly created entity had £670 billion ($871 billion) under management following the merger, which was completed on Aug. 14, 2017.
Key Takeaways
- On March 6, 2017, Standard Life Plc. and Aberdeen Asset Management Plc., two Scottish companies, announced they were merging to form Standard Life Aberdeen.
- Standard Life shareholders held 66.7% of the new company; the remaining amount went to Aberdeen stockholders.
- The new company had £670 billion ($871 billion) under management following the merger, completed on Aug. 14, 2017.
- The move put Standard Life Aberdeen in competition with other major asset managers, including behemoths like BlackRock (BLK) and The Vanguard Group.
- Since the merger, Standard Life Aberdeen has gained a new CEO, sold off Standard Life Assurance, and changed its name to ABRDN.
A Smooth Merger
Aberdeen Asset Management and Standard Life first began to have serious talks in January 2017 about combining their operations. Behind the scenes, the process seemed to go smoothly. Then-Aberdeen CEO Martin Gilbert said despite the company’s flailing finances, he felt no pressure, either from shareholders or from the company’s finances, to join with Standard Life.
“We didn’t have to do the deal. We have no debt and 500 million pounds of cash,” Gilbert said in a call with reporters, according to Bloomberg.“Let me be absolutely clear — we had a very good future if we wanted as an independent company."
But for Aberdeen, the merger did provide some relief from its struggling operations. It had frozen salaries and was reportedly mulling scaling back dividends to cut costs. Standard Life, which was nearly twice as valuable as Aberdeen, offered stability.
The merger gave Standard Life shareholders 66.7% of the new company. Aberdeen shareholders, who would hold 33.3%, received 0.757% of a share of the new company for each share of Aberdeen they held. That arrangement was in line with each company’s market value before the merger discussions were disclosed in March.
Joint Management
Both Gilbert and Standard Life CEO Keith Skeoch originally led the new combined company, combing through the company's operations to improve efficiency. "A lot of people have questioned the wisdom of this relationship between these two very big personalities but it is actually very sensible to involve both in the integration of these two substantial businesses,” Liberum bank analyst Justin Bates told Financial Times.
Both have since departed the business.Stephen Bird, formerly of Citigroup, has been acting as CEO since July 2020.
On July 5, 2021, Standard Life Aberdeen officially changed its name to ABRDN plc (pronounced "aberdeen"). It had sold Standard Life Assurance to the Phoenix Group in 2018.
Shareholder and Analyst Approval
In a joint statement, the companies said the takeover had the support of Aberdeen shareholders. Among them, Mitsubishi UFJ Financial Group Inc. had a 17%t stake in Aberdeen, making it its largest shareholder. Lloyds Bank Group Plc, with a 10% stake and the third-largest stake in Aberdeen, was also in favor of the merger, the companies said.
Analysts expressed generally positive sentiment on the merged company. Citigroup analysts said the new company provides “better growth” than Standard Life would alone. The firm also thought that the combined company will have “better strategic positioning” than Aberdeen Asset would alone. “We see upside driven by cost synergies,” analysts wrote in a note to clients.
But the merger would require layoffs, predicted some analysts and newspapers like The Telegraph. When they combined, Standard Life employed about 8,335 people and Aberdeen employed 2,800. As of 2021, the merged firm has over 5,000 employees.
Aberdeen had previously considered other options for a merger, including a bid for Pioneer Global Asset Management. When it declined that deal, analysts began to suspect another option was on the table.
The Bottom Line
When the merger was announced in March, stocks of both companies rallied on the London exchange. Standard Life Aberdeen began competing with other major asset managers, including behemoths like BlackRock (BLK) and The Vanguard Group.
FAQs
Standard Life shareholders held 66.7% of the new company; the remaining amount went to Aberdeen stockholders. The new company had £670 billion ($871 billion) under management following the merger, completed on Aug.
Are Aberdeen Standard and Standard Life the same? ›
Abrdn plc (stylised as 'abrdn', disemvoweling of "Aberdeen"), formerly Standard Life Aberdeen plc, is a United Kingdom-based global investment company headquartered in Edinburgh, Scotland. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
What is the relationship between Standard Life and abrdn? ›
SLA to become abrdn
Standard Life Aberdeen plc ("the Company") today announces its intention to change its name to "abrdn plc". The new abrdn name (pronounced “Aberdeen”) will be part of a modern, agile, digitally-enabled brand that will also be used for all the Company's client-facing businesses globally.
What kind of merger was Standard Life and Aberdeen? ›
The merger harnesses Standard Life's and Aberdeen's complementary, market leading investment and savings capabilities, creating an investment group with strong brands, leading institutional and wholesale distribution franchises, market leading platforms and access to longstanding, strategic partnerships globally.
Do I lose my stock after merger? ›
When the deal is closed, existing shareholders will receive cash in return for their stock (i.e., their shares will be sold to the acquiring company). If a public company takes over a private firm, the acquirer's share price may fall a bit to reflect the cost of the deal.
What happens to my stock shares after a merger? ›
Depending on the specifics of the merger, investors may have their shares cashed-out, or exchanged for shares of the new company. Prices of stocks may increase or decrease, often depending on if they're shares of the target or acquiring company.
How much will Standard Life shareholders receive? ›
What happens to the value of my shareholding? The return of value of 73 pence per Existing Ordinary Share plus the value of your holding of New Ordinary Shares should, subject to market fluctuations, approximately equal the value of your holding of Existing Ordinary Shares.
Is Standard Life being taken over? ›
In May 2021, Phoenix Group acquired the 'Standard Life' brand and in July 2021 Aberdeen Standard Life Group companies rebranded as 'abrdn'.
Is Standard Life doing well? ›
From the 135 Standard Life funds analysed just 5.92% received an impressive 4 or 5-star performance rating. Although these funds represent only a small proportion of their pension fund range, they are funds that have consistently been among the best in their sectors for performance.
Why have abrdn shares dropped in value? ›
In the last half decade abrdn saw its share price fall as its EPS declined below zero. This was, in part, due to extraordinary items impacting earnings. At present it's hard to make valid comparisons between EPS and the share price. However, we can say we'd expect to see a falling share price in this scenario.
By choosing the abbreviated name, the team hoped to turn the company into a 'modern, agile, digitally-enabled' brand ready for the future (which apparently contains no letter 'e').
What is the outlook for abrdn shares? ›
Share price forecast in GBX
The 13 analysts offering 12 month price targets for Abrdn PLC have a median target of 195.00, with a high estimate of 261.00 and a low estimate of 145.00. The median estimate represents a -5.57% decrease from the last price of 206.50.
What is Standard Life Aberdeen changing its name to? ›
Standard Life Aberdeen has officially changed its name to abrdn, the company announced this morning. The firm's stock market ticker was changed from SLA to ABDN at 8am today. Stephen Bird, CEO of abrdn plc, says: “I'm very excited to have reached this milestone.
What is Standard Life now called? ›
Part of Phoenix Group. As part of Phoenix Group (a FTSE 100 company), the UK's largest long-term savings and retirement company, we are now even stronger.
Has Standard Life Aberdeen changed its name? ›
Standard Life Aberdeen Plc's new name may not have won broad acclaim, but at least it's easier to Google. The U.K. asset manager is now officially known as abrdn plc, all lower case and pronounced “Aberdeen”.
Should I sell before a merger? ›
When a company announces a merger or acquisition, it's time to move fast. Stock prices typically spike when a company is being bought out for a premium. It's a great time to sell your stocks and lock in your profits. Experts say that the average takeover premium can range between 20 and 40 percent.
Is it good to buy stock before a merger? ›
Stock prices of potential target companies tend to rise well before a merger or acquisition has officially been announced. Even a whispered rumor of a merger can trigger volatility that can be profitable for investors, who often buy stocks based on the expectation of a takeover.
Why do people leave after merger? ›
Three of the top reasons why employees leave after a merger or acquisition are mistrust of leadership, job insecurity, and disliking the new company culture.
Do stock prices go up or down after a merger? ›
When two companies merge, the stock prices of the target company are likely to rise due to the premium paid by the acquiring company.
Why do stock prices go down after a merger? ›
If they believe that the deal will generate value - even after the premium is taken into account - they'll want to buy more of the stock, pushing its value up. On the other hand, if they believe the deal will destroy value, they'll begin offloading their stock, pushing down its value.
You can buy or sell Abrdn plc shares through a Stocks and Shares ISA, Lifetime ISA, SIPP or Fund and Share Account.
Who gets the shares when a shareholder dies? ›
What happens to shares upon the death of a shareholder? If the shares are registered in the deceased's name alone then legal title to the shares passes automatically to the personal representatives – a transfer process known as transmission.
When did Standard Life give free shares? ›
Standard Life converted from policyholder ownership to a stock company – a process called demutualisation – on 10 July 2006. Eligible Members are entitled to receive shares in Standard Life plc, as a consequence of this demutualisation.
Is Standard Life changing its name? ›
Standard Life Aberdeen has completed the change of its company name to Abrdn. The move, initially announced in April, will also see the company ticker change from SLA to ABDN.
Who now owns Standard Life? ›
Phoenix bought the Standard Life brand name in May 2021 after it bought Standard Life Aberdeen's insurance arm in 2018 for £3.28bn. Elsewhere in its results, Phoenix said it has made the strategic decision to “re-phase” the remaining legacy Standard Life migrations, meaning they will now complete by 2025.
Who owns Aberdeen Standard Investments? ›
Aberdeen Standard Investments is an asset management and investment company and subsidiary of Standard Life Aberdeen.
Is Standard Life a good share to buy? ›
Strong and stable
Historically speaking, the company has not provided great long-term returns for investors. The share price has returned a loss over the last five years despite its recent rally. Investors don't seem to have been convinced by the 2017 merger between Standard Life and Aberdeen Asset Management.
What is the risk rating for Standard Life Managed pension fund? ›
This investment has a volatility rating of 5
Remember, as with any investment, the value of your fund can go up or down, and may be worth less than you paid in.
Why has my private pension gone down? ›
The principle is, that if the value of the underlying companies you're invested in fall, then the value of your plan falls. Where the money 'goes' is that your portion of that company has decreased in value and the value of the unit price goes down with it.
What is the share price forecast for abrdn in 2023? ›
Is there a Abrdn share price forecast for 2023? The analyst consensus target price for shares in Abrdn is 195.52p. That is 5.64% below the last closing price of 207.20p. Analysts covering Abrdn currently have a consensus Earnings Per Share (EPS) forecast of £0.12 for the next financial year.
Standard Life Investments Property Income's previous ex-dividend date was on May 17, 2023. Standard Life Investments Property Income shareholders who own GB:API stock before this date received Standard Life Investments Property Income's last dividend payment of 1p per share on May 30, 2023.
Why are Aberdeen shares so low? ›
The company took a big hit when Lloyds Banking Group withdrew £24.4bn in the half. That's due to a dispute stemming from the merger of Standard Life and Aberdeen Asset Management to create the current firm. Lloyds saw a conflict of interest.
Is Standard Life Aberdeen a good investment? ›
Aberdeen Standard Investments Fund Performance
Our analysis of the 129 Aberdeen Standard funds identified that 15 consistently outperformed at least 75% of funds in their sectors over the past 1, 3 & 5 years, with a total of 27 of their funds receiving a strong 4 or 5-star performance ranking.
Who are Standard Life Aberdeen competitors? ›
The main competitors of Standard Life Aberdeen include Schroders (SDRC), RSA Insurance Group (RSA), F&C Investment Trust (FCIT), Jardine Lloyd Thompson Group (JLT), Intermediate Capital Group (ICP), Greencoat UK Wind (UKW), AIB Group (AIBG), Alliance Trust (ATST), RIT Capital Partners (RCP), and The Renewables ...
Who are competitors to abrdn? ›
Abrdn's competitors include Prudential, Perspective, Dvara Holdings, Tilney.
What is the minimum investment for abrdn? ›
The minimum initial investment into an abrdn fund is $20,000. We have the right to fully redeem an investment in a fund if a holding falls below $20,000.
Is Standard Industries a good buy? ›
The Price Trend analysis by MoneyWorks4Me indicates it is Weak which suggest that the price of Standard Industries Ltd is likely to Fall in the short term. However, please check the rating on Quality and Valuation before investing.
What did Standard Life shares become? ›
Standard Life Aberdeen has officially switched its name to Abrdn after first announcing the rebrand back in April. The firm sealed the face lift by changing its ticker today (July 5) from SLA to ABDN.
What are Standard Life Aberdeen shares called now? ›
Get the latest live Standard Life (ABDN) share price, performance and insights. Abrdn PLC (formerly Standard Life Aberdeen) (lon:abdn), is a global asset management company that offers a wide range of investment products and services for both individual and institutional clients.
What happens when one shareholder dies? ›
Usually PRs leave the shares registered in the deceased's name during the administration of the estate, and afterwards they become a shareholder themselves. Then they'd transfer the shares to beneficiaries identified in the will, or sell the shares to a third party.
A special resolution in company law is only passed after getting approval from at least 75% of the shareholders, in person or by proxy. They must also have the entitlement to vote on the same. Or all the shareholders must approve it in writing at the company's general meeting.
Is it a good time to sell my abrdn shares? ›
abrdn has received a consensus rating of Strong Sell. The company's average rating score is 1.14, and is based on no buy ratings, 1 hold rating, and 6 sell ratings.
Should I sell oldest shares first? ›
Shares with the greatest cost basis are sold first. If more than one lot has the same price, the lot with the earliest acquisition date is sold first. Shares with a long-term holding period are sold first, beginning with those with the greatest cost basis.
Who buys my shares when I sell? ›
Market makers do take the opposite side of a trade, and they may act as a buyer if you are a seller or vice versa. Some firms that offer brokerage services are also market makers. Market makers are there to help facilitate trade so there are buyers and sellers in stocks listed on the major exchanges.
How do I sell my shares back to the company? ›
The simplest solution for selling private shares is to approach the issuing company and ask how other investors liquidated their stakes. Some private companies have buyback programs, which allow investors to sell their shares back to the issuing company.
