MARTIN Gilbert's Assetco has agreed a £98.8m takeover of listed asset management firm River & Mercantile (R&M) in its biggest deal to date.

The all-share takeover deal agreed yesterday will see R&M's shareholders scoop up 41.6 per cent of the combined group following the completion of the deal, which bosses said was conditional upon the sale of R&M's solutions business to asset management firm Schroders.

Aim-listed Assetco said in a statement yesterday: "The Assetco Board believes that there is a strong strategic and financial rationale for the acquisition and that a combined RMG and Assetco business is consistent with Assetco's strategy to be market leading in its chosen best-in-class investment strategies."

R&M secured a sale of its solutions business to Schroders in October for £230m and Assetco bosses confirmed that the sale had received regulatory approval and was expected to close imminently. The sale will generate £190m for R&M shareholders.

The majority of R&M's $49.9bn (£36.9bn) assets under management will be snapped up by Schroders in the sale, and Assetco will take on around $4.2bn assets as part of the takeover, Assetco chief executive Campbell

Fleming told reporters yesterday.

R&M will now form the foundation of Assetco's active equities business alongside the funds managed by Edinburgh-based firm Saracen, which Assetco acquired in May last year for £2.75m.

Veteran fund manager Gilbert told reporters: "We believe River & Mercantile's thoughtful asset management strategy will offer powerful growth opportunities as we move into more unsettled and uncertain markets."

Campbell Fleming will now oversee the day-to-day running of the businesses, while Gilbert and others focus on the M&A.

(c) 2022 City A.M., source Newspaper