Henderson Group shares surge after Janus Capital merger announcement
Shares in Henderson Group surged on Monday after it announced a merger with US firm Janus Capital, creating an investment titan with more than 320 billion US dollars (£247 billion) in assets under management.
The company's stock was up 12.6% in morning trading, with shares worth 261.3p each.
The deal will see the combined entity renamed Janus Henderson Global Investors and hold a combined market capitalisation of six billion US dollars (£4.6 billion).
The two firms said their "merger of equals" will see cost savings of at least 110 million US dollars (£84.7 million) a year. Henderson and Janus shareholders are expected to own approximately 57% and 43% respectively.
The companies said on Monday: "Janus's strength in the US markets will be combined with Henderson's strength in the UK and European markets to create a truly global asset manager with a diverse geographic footprint which closely matches the global fund management industry."
Henderson boss Andrew Formica and Janus chief executive Dick Weil will lead the new firm, which will apply for admission to trade on the New York Stock Exchange as its primary listing and ditch its London listing.
The deal, which still requires shareholder and regulatory approvals, has already received the blessing of Janus's largest investor, Dai-ichi Life.
The combined firm will have around 2,300 employees across 29 locations around the world, with revenues of 2.2 billion US dollars (£1.7 billion) and underlying earnings of 700 million US dollars (£539 million).
Mark Dampier, head of investment research at Hargreaves Lansdown, said: " On the face of it, the deal makes a lot of sense and the groups complement each other. Scale can help keep costs down for fund groups, allowing them to offer more competitive fund pricing, while still delivering good active performance.
"The fund management industry is polarising, with the likes of Henderson and Janus seeing the benefits of scale at one end, and smaller boutique fund management groups focusing on niche propositions at the other. Those in the middle will need to be on their game to keep up."