* Firms agreed 11 billion pound merger in March
* 800 jobs to go once deal completed
* Partners to take 320 million pound charge
(Adds detail from statement, analyst reaction)
By Carolyn Cohn and Simon Jessop
LONDON, May 10 Standard Life and Aberdeen
Asset Management expect to cut 800 jobs, nearly 10
percent of the firms' combined workforce, as part of a merger
to create Britain's biggest listed investment manager.
The companies said they planned to take a one-off charge of
320 million pounds ($415 million) to help pay for the plan.
The cuts form a key part of the Scottish companies' agreed
11 billion pound ($14.2 billion) all-share deal, announced in
March, which will give the firm combined assets of 670 billion
pounds and aims to save 200 million pounds in annual costs.
In a merger prospectus released late on Tuesday, Standard
Life said 75 percent of those annual cost savings would be seen
by the end of the second year of the combined company, to be
renamed Standard Life Aberdeen.
The firms are looking to shore up their defences in the face
of competition from lower-cost index funds and the increased
cost of tougher regulations - pressures that are expected to
prompt more industry consolidation.
While savings would offer a potential short-term earnings
uplift, Barclays analyst Alan Devlin said he remained
'underweight' on both companies' stocks, in a note to clients.
"In our view the merger will do little to improve underlying
outflows in each businesses' key asset management franchise."
Standard Life also gave a trading update, saying it had
"made further progress" in the first three months of 2017, with
net inflows of 3.1 billion pounds across its products.
While that helped take the group's total assets under
administration to 361.7 billion pounds, it excluded outflows of
2.8 billion pounds from its flagship Global Absolute Return
Strategies (GARS), continuing a period of weak performance.
"Net flows for SL were disappointing," said Bernstein
analyst Edward Houghton in a note to clients.
"On balance we'd expect "The Street" could bring numbers
down somewhat for (a) standalone Standard Life, though we note
that Aberdeen posted a better-than-consensus first-half result
Aberdeen's half-year results on May 2 showed a jump in
revenues and profits, and a slowdown in the pace of outflows
from its emerging market equities funds.
Shares in Standard Life and Aberdeen were up 0.2 percent at
0744 GMT, in line with the broader market.
Despite planning to shed jobs, the board of the combined
firm is set to grow in size to 16 members, equally split between
both firms, despite Aberdeen shareholders holding just a third
of the new company.
Headed by Gerry Grimstone, current Standard Life chairman,
Standard Life and Aberdeen chief executives Keith Skeoch and
Martin Gilbert will be co-chief executives of the new firm, a
structure some investors have criticised.
Despite that, Aberdeen's largest shareholders - Mitsubishi
UFJ Trust and Banking Corporation and Lloyds Banking Group
, with which Aberdeen has strategic relationships - have
both pledged their support for the deal.
Shareholders of both firms will vote on the merger at
extraordinary general meetings on June 19, with three quarters
of Aberdeen shareholders needed to approve the deal for it to
proceed. The deal is expected to complete by mid-August.
($1 = 0.7733 pounds)
(Additional reporting by Subrat Patnaik in Bengaluru; Editing
by Keith Weir)