(Reuters) - Britain's Schroders (SDR.L), opens new tab is being taken over by U.S. asset manager Nuveen for 9.9 billion pounds ($13.5 billion), in the largest-ever acquisition of a European fund manager that spells the end of independence for the 222-year old London firm.
The acquisition, which will see the British money manager's founding family sell up, will create a combined group with $2.5 trillion of assets under management. Schroders' shares jumped 29%.
"This is a massive transformational step for both firms," Bill Huffman, CEO of Nuveen, told Reuters, adding the deal gave it a global footprint and that Nuveen was open to further deals to grow.
The deal values Schroders at 16.5 times 2026 earnings, RBC analysts said.
COMPETITION FROM BIGGER US RIVALS
Mid-sized active stock-picking asset managers in Europe such as Schroders are confronting the need to combine to compete with larger U.S. rivals like BlackRock (BLK.N), opens new tab and Vanguard that sell cheaper index-trackers and other passive products.
Recent multi-billion dollar deals include BNP Paribas's 2025 purchase of AXA's fund arm, although other European merger negotiations have broken down.
Analysts raised the possibility of some Schroders shareholders pushing for a higher price.
"Despite board support, only 41% of shareholders have given irrevocable backing, suggesting significant room for holdouts to push for a higher price. With the fundamentals improving and shareholder alignment far from locked, this story is unlikely to end at the current terms," said Johann Scholtz at Morningstar.
IMPLICATIONS FOR THE REST OF THE SECTOR
Schroders grew from financing transatlantic trade in the 19th Century to becoming Britain's biggest standalone asset manager. Its shares have sunk 30% over the past five years, though they have clawed back some ground under CEO Richard Oldfield.
The founding family - which still has two seats on the board - will sell their 41% stake as part of the sale, Oldfield told Reuters.
Bankers and analysts say mid-sized asset managers such as Aberdeen (ABDN.L), opens new tab, are vulnerable to bigger suitors, especially cash-rich U.S. businesses.
"The deal also has a positive readacross for the rest of the sector, as it acts as a statement in the value of traditional asset management," RBC analysts said.
Asset management deals have a chequered history, with several struggling over integration issues.
Aberdeen Asset Management and Standard Life agreed to combine in 2017 but since then, the shares are down about 50%.
The deal, which ends the independence of a centuries-old London finance name, also highlights the appeal of UK stocks trading at a discount to European and U.S. companies.
AMONG THE BIGGEST ASSET MANAGERS
The combined group's $2.5 trillion in assets under management puts it slightly below Europe’s biggest fund manager, Amundi (AMUN.PA), opens new tab, but way below U.S. behemoths BlackRock, Vanguard and State Street.
Schroders' shareholders will receive 590 pence per share in cash plus permitted dividends of up to 22 pence, valuing the company at 612 pence per share - a 34% premium to Wednesday's closing price, according to LSEG data.
BNP Paribas was sole financial adviser to Nuveen, with Wells Fargo and Barclays advising Schroders.
Separately, Schroders reported adjusted operating profit of 756.6 million pounds for 2025, up 25% from a year earlier.
Oldfield will continue to lead Schroders after the deal closes and London will remain its biggest office.
($1 = 0.7334 pounds)
