The deal will see Rathbones retain its listing

Rathbones has agreed to merge with the UK wealth business of Investec in an all-share deal valuing the latter’s business at £839 million.

The deal excludes excludes Investec Bank (Switzerland) AG and Investec Wealth & Investment International.

Rathbones will remain an independent listed company with Investec as a long-term, strategic shareholder.

Investec will have a 41.25% stake in Rathbones with voting rights limited to 29.9%.

The enlarged group will have around £100bn of funds under management and administration.

Cash synergies of at least £60m are forecast, primarily cost savings but also higher net interest income.

The deal is expected to enhance earnings for Rathbones in year one after completion with low-teens EPS accretion targeted by year three and a double-digit post-tax return on invested capital in the third full year also forecast.

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

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