AssetCo has agreed an all-share acquisition of wealth manager River and Mercantile Group (RMG) for £98.8m.
The deal values each share of RMG at 114.6 pence, based on the closing price of 1,550 pence per AssetCo share on 24 January.
The terms are contingent on the previously agreed sale of RMG's fiduciary business to Schroders for £230m, which was agreed in October. It will see shareholders receive £190m in cash - taking the value of the entire deal to £289m.
Current RMG investors will receive 0.073 AssetCo shares for each RMG share they hold.
Following completion, RMG shareholders will own approximately 41.6% of the combined group. The merger is expected to complete in the second quarter of this year.
AssetCo is planning that RMG, together with its existing active equity manager Saracen, will form the foundation for its active equity fund business, leveraging the investment expertise of both businesses.
It is intended that RMG's new sustainable infrastructure investment strategy will form the first building block in the combined group's private markets capabilities.
RMG currently has £49.9bn worth of assets under management for clients investing in the UK, European and global equities.
It is the “largest and most significant deal” secured by AssetCo in its first year since Gilbert put a new team in place.
Chairman Gilbert said: "The asset and wealth management industry is contending with significant structural shifts, including technological advances, a reorientation of investing and evolving client needs - we are committed to building an agile asset and wealth manager that is fit for purpose in the 21st century.
“The acquisition of RMG is a core part of this strategy; it strengthens our active equity capability and importantly provides a foundation stone to building a private markets business given its infrastructure investment team.
“RMG complements our existing presence in thematic investing with Rize ETF and our investment in Parmenion, a digital platform for the financial planning sector.”
RMG chief executive James Barham said: “This transaction secures continuity of the environment and investment culture that has been a critical factor to the success of the business and provides stability and support as the business continues to invest for the future.”
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