Rathbones Group Plc has agreed to buy the UK wealth management business of Investec Plc in an all-share deal valued at £839 million.
The merger will create a wealth manager with about £100 billion in funds under management and administration, the companies said.
Founded in Liverpool in 1742, Rathbones has retained a major base in the city and is a key reason why the area is the UK’s largest centre for wealth management outside of London.
Investec will be a minority shareholder in the new entity with a 41.25% stake and 29.9% voting rights.
“The combination brings together two trusted and prestigious UK wealth management businesses with closely aligned cultures and operating models and a shared commitment to client-centric values and sustainable growth,” said Rathbones.
“The combination represents a significant value creation opportunity for both Rathbones and Investec Group shareholders.
“Under the terms of the combination, new Rathbones shares will be issued in exchange for 100% of Investec W&I UK’s share capital.
“The enlarged Rathbones group will remain an independent premium-listed company operating under the Rathbones brand with Investec Group as a long-term, strategic shareholder.
“Following completion, Investec Group will have an economic interest in Rathbones’ enlarged share capital of 41.25% with Investec Group’s voting rights limited to 29.9% of Rathbones’ enlarged total voting rights.
“Existing Rathbones shareholders will have an economic interest of 58.75% and voting rights of 70.1%. The terms of the combination imply an equity value of approximately £839 million for Investec W&I UK.”
The enlarged Rathbones Group will continue to be chaired by Clive Bannister with the executive leadership team, under Rathbones CEO Paul Stockton, bringing together an experienced leadership team from both businesses, including Investec W&I UK CEO Iain Hooley.
Bannister said: “Bringing Rathbones together with Investec W&I UK will create the UK’s leading discretionary wealth manager with approximately £100 billion of funds under management and administration.
“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.”
Investec Group CEO Fani Titi 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.”