Rathbones and Investec Group have announced they are to merge and create a new discretionary wealth manager with approximately £100bn of funds under management.

Under the terms of the move, new Rathbones shares will be issued in exchange for 100% of Investec W&I UK’s share capital, representing a significant value creation opportunity for both Rathbones and Investec Group shareholders.

Rathbones said the move will bring together two trusted UK wealth management businesses with closely aligned cultures and operating models, as well as a shared commitment to client-centric values and sustainable growth.

The enlarged Rathbones Group will remain an independent premium listed company operating under the Rathbones brand, with Investec Group as a long-term, strategic shareholder.

“This transaction not only presents a compelling strategic and financial rationale, but also accelerates Rathbones’ growth strategy,” chair of Rathbones, Clive Bannister, commented.

“Operating at scale allows the group to offer an even more attractive proposition to clients and colleagues, supporting future growth and creating significant value for Rathbones' shareholders. I look forward to Investec W&I UK colleagues joining the enlarged Rathbones Group, and welcome Investec Group as a strategic shareholder. I am hugely excited about what the combination can deliver.”

The terms of the combination imply an equity value of approximately £839m for Investec W&I UK. The Investec W&I UK transaction perimeter includes Investec Group’s wealth and investment businesses in the UK and Channel Islands, but excludes Investec Bank (Switzerland) AG and Investec Wealth & Investment International (Pty) Ltd, both of which will remain wholly-owned subsidiaries of Investec Group.

Investec Group chief executive officer, Fani Titi, described the strategic fit of the two businesses as “compelling”, “with complementary strengths and capabilities” to enhance the overall proposition for clients.

“This will be supported by the strategic partnership which offers attractive growth and collaboration opportunities for both groups,” Titi added. “The transaction represents a real step-change and long-term opportunity for our UK wealth strategy, underscores our commitment to the UK wealth management market and enhances our UK business as a whole.”

Rathbones is expecting the completion of the deal to occur in Q4 2023, subject to regulatory approvals.

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