Aberdeen Asset Management confirmed on December 31 that it was buying Credit Suisseā??s traditional fund management arm for up to Ā£250m in shares.
The fund management group expects the cost of running Credit Suisseā??s business to be no more than 35-40 per cent of the divisionā??s income - significantly lower than they are at the moment. It also expects to benefit from distributing more of its products to Credit Suisseā??s private banking customers.
The deal will expand Aberdeenā??s assets under management by almost 50 per cent and make it the UKā??s largest listed fund manager. It was finalised just before the end of the year so that it could be reflected in Credit Suisseā??s financial statements. The Swiss bank is taking a CHF600m charge against profits to reflect the loss of goodwill associated with the operations.The agreement will see Aberdeen issue up to 240m new shares to Credit Suisse in return for the business, though this will be scaled back if a significant number of clients defect before the deal is completed in June 2009. The deal will leave Credit Suisse with a shareholding of up to 25 per cent in Aberdeen, and a seat on its board of directors.
Aberdeen won control of the Credit Suisse business after a four-month auction that also attracted interest from Schroders, the rival UK fund manager.
