Edinburgh-based Standard Life PLC reached an agreement on Monday to buy Aberdeen Asset Management PLC for 3.8 billion British pounds sterling ($4.7 billion) in a deal that will create Britain’s largest asset-management company.

The deal will merge the two “active” fund managers, which have struggled since the financial crisis, leading investors to pull money out of their funds.

Aberdeen shareholders will receive 0.757 Standard Life shares for each share they own, giving them 33.3% of the combined company. Keith Skeoch, CEO of Standard Life, and Martin Gilbert of Aberdeen, will be co-CEOs of the merged firm.

The companies expect to cut costs by 200 million pounds sterling after the merger and hundreds of jobs are a risk of being eliminated.

“This merger brings financial strength, diversity of customer base and global reach to ensure that the enlarged business can compete effectively on the global stage,” Gilbert said.

Aberdeen, formed in 1983, said it had achieved results despite a “challenging market and industry environment,” such as particularly low interest rates and low returns from emerging markets.

“It has proved increasingly challenging for active managers to outperform in these conditions,” it said in its announcement with Standard Life.

Experts on the industry say the combination makes strategic sense.

“Aberdeen has been overly reliant on Asian and emerging markets for a long time and this has created significant volatility in its business performance, while Standard Life will see those Asian and emerging market assets as very complementary to its fixed interest and U.K. asset base,” said Ryan Hughes, head of fund selection at AJ Bell. “If the merger goes ahead, investors can expect a long period of fund range consolidation as the combined group looks to cut costs.”

Shareholder must still approve the deal.

Aberdeen manages 303 billion pounds of assets, employs 2,700 people and operates in 27 countries.

Standard Life has 357 billion pounds of assets under administration, including 278 billion pounds that are actively managed. It employs 6,300 people and has operations in the U.K., North America, Europe, Asia and Australia as well as joint ventures in China and India.

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