Fears for jobs as finance firms announce plans for £11bn merger

HUNDREDS of jobs are feared to be at risk after a finance firm Standard Life agreed a multi-billion pound merger with a rival company.

Keith Skeoch, Standard Life CEO (right) and Martin Gilbert, Aberdeen Asset Management CEO, after the two companies agreed terms on an £11 billion merger that will create Britain's biggest asset manager. Picture; PA

The £11 billion deal with Aberdeen Asset Management will see the two companies join forces to become Britain’s biggest asset manager, overseeing £660bn worth of global assets.

Edinburgh-based Standard Life currently employs more than 8000 people and it is now feared several hundred jobs could be at stake as the pair look to make savings of up to £200 million.

Alex Cole-Hamilton, Lib Dem MSP for Edinburgh Western, warned the news would serve as a “hammer blow” to the confidence of the Capital’s financial services sector.

Keith Skeoch, Standard Life CEO (right) and Martin Gilbert, Aberdeen Asset Management CEO, after the two companies agreed terms on an £11 billion merger that will create Britain's biggest asset manager. Picture; PA

He said: “News of the merger between Standard Life and Aberdeen Asset Management will cause some degree of apprehension amongst staff who are working in the city at a time when the financial services sector in Scotland has suffered through the instability caused by Brexit and discussions around another independence referendum.

“I want to be sure that senior management of both organisations have the best interests of staff right at the heart of the negotiations.

“Of course businesses have to develop, they have to expand and grow – and in some cases merge – but we always have to make sure there’s a balance struck the desire for profitability and the duty of care they have for their staff.”

Former Standard Life employee and Edinburgh West MP Michelle Thomson, a member of the business, energy and industrial strategy committee, said she would be requesting assurance over job cuts. She said: “Both Standard Life and Aberdeen Asset Management are successful institutions and I hope the merger continues to build on their respective success.

Keith Skeoch, Standard Life CEO (right) and Martin Gilbert, Aberdeen Asset Management CEO, after the two companies agreed terms on an £11 billion merger that will create Britain's biggest asset manager. Picture; PA

“That said, I will be seeking assurances around any planned job losses and have written to both companies for clarification.”

The news prompted a 7 per cent rise in Standard Life shares yesterday morning, with those at Aberdeen also rising, up 5.3 per cent.

Keith Skeoch and Martin Gilbert, the firms’ respective bosses, will become co-chief executives of the new merged company.

Mr Skeoch said: “We strongly believe we can build on the strength of the existing Standard Life business by combining with Aberdeen to create one of the largest active investment managers in the world and deliver significant value for all of our stakeholders.”

Under the proposed merger, Aberdeen shareholders would own 33.3 per cent and Standard Life shareholders 66.7 per cent of the combined group. Scottish Conservative shadow economy secretary Dean Lockhart echoed concerns over jobs.

But he added: “We hope the two companies will ensure any losses are kept to a bare minimum and that staff get the clarity they need as quickly as possible.”

The Scottish Government welcomed the news, saying it was “a potential vote of confidence in Scotland’s financial services sector”.

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