Rathbones set for £2bn merger with S&W

X The Business Desk

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Rathbone Brothers, the wealth manager founded in Liverpool 275 years ago, is on the verge of a £2bn merger with Smith & Williamson, according to reports.

Sky News was the first to report that Rathbones was in advance talks on an agreement to join the S&W – which is values at £600m – in an all-share merger.

If it goes ahead the enlarged Rathbones empire – valued at £1.4bn – would create a company employing about 300 people and would rank among one of the most significant deals so far this year.

The deal would be structured as a takeover by FTSE 250 company Rathbones, run by chief executive Philip Howell, and see S&W‎ employees, who own the majority of the company, handed shares.

Canadian investor AGF has a 30% stake in S&W for 15 years but has stepped up efforts towards an exit recently.

Rathbones is a specialist in investment and wealth management services for private clients, professional intermediaries and trustees. It manages about £32bn of clients’ money through Rathbone Investment Management.

The addition of S&W’s asset management arm would create a company with more than £50bn under management, exceeding Rathbones’ target of topping £40bn by 2020.

S&W is reported to being advised on the talks by Evercore, and Rathbones by JP Morgan and Royal Bank of Canada. Neither has commented.