Rathbones and Smith & Williamson in £55bn merger talks

Rathbones eyes merger with Smith & Williamson

Rathbones, the wealth manager whose founding family helped to abolish slavery, is in talks over a £2bn merger with rival investment house Smith & Williamson (S&W).

A combined group would have well over £50bn in AUM or advice, with 3,000 people employed across the two companies.

Both companies said they are confident the combination would bring meaningful benefits to the stakeholders in both businesses, however there is now no certainty that a deal will be struck.

Smith & Williamson, which runs £19 billion, has been valued at £600 million. Meanwhile, Rathbones has 15 bases throughout the United Kingdom including Birmingham, Bristol, Cambridge, Chichester, Exeter, Kendal, Liverpool, London, Lymington, Newcastle and Winchester.

FTSE-250 listed Rathbone‎s has a market value of around £1.4bn, while a market source told Sky News a potential deal would attribute a valuation of close to £600m to S&W. It's stock has risen more than 52 per cent in the past year.

Combining the two businesses would give Rathbones access to S&W's network of specialist tax and financial advisers at a time when clients are seeking ‎increasingly sophisticated services from wealth management firms.

Rathbones' total funds under management stood at £36.6bn at the end of the first half of 2017, with the investment management arm contributing £32bn.

"With markets at elevated levels and passive managers such as BlackRock and Vanguard taking ever greater market share, there are likely to be further opportunities for mid-tier asset managers to come together, find synergies to cut costs and look to regain the impetus for active management", Hughes added.

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