Proactive Investors - Rathbones Group (LON:RAT) is to combine with Investec Wealth & Investment Ltd to create the UK's leading discretionary wealth manager.
The all share deal will see Rathbones remain an independent listed company with Investec as a long-term, strategic shareholder.
Investec, valued at £839mln under the deal, will have a 41.25% in Rathbones with voting rights limited to 29.9%.
The agreement excludes Investec’s wealth and investment businesses Switzerland and its international business.
The enlarged group will have around £100bn of funds under management and administration.
Cash synergies of at least £60mln are forecast primarily cost savings but also higher net interest income.
The deal is expected to enhance earnings for Rathbones in year one after completion with low-teens EPS accretion targeted by year three and a double-digit post-tax return on invested capital in the third full year also forecast.
Fani Titi, Investec Group Chief Executive, said: “The strategic fit of the two businesses is compelling with complementary strengths and capabilities to enhance the overall proposition for clients.”
Clive Bannister, Chair of Rathbones, said: “This transaction not only presents a compelling strategic and financial rationale, but also accelerates Rathbones' growth strategy.”