THE mega merger of Standard Life and Aberdeen Asset Management had added nearly £600 million to the combined market value of the two institutions by last night, as investors signalled their approval of one of the biggest deals in Scottish corporate history.

Shares in Standard Life closed up six per cent, adding £431.6m to its market capitalisation, and Aberdeen rose four per cent, swelling its worth by £158.4m, as details of the giant merger were announced. The share price hikes swelled the value of the merged entity to nearly £12bn.

The combined company, which has still to be named, will operate in 80 countries, with more than £660 billion of assets under management, making it one of the biggest asset managers in the world.

Keith Skeoch and Martin Gilbert, the respective leaders of Standard Life and Aberdeen, emphasised the complementary nature of the deal, with Aberdeen’s strength in emerging markets dovetailing with the Edinburgh pension giant’s presence in developed markets. But analysts pointed to significant overlap between the two in areas such as multi-asset, fixed income and property investment products.

There are fears hundreds of jobs in Scotland are at risk after the companies said they would be looking to make £200m of cost savings in the next three years.

Mr Skeoch and Mr Gilbert refused to be drawn on job cuts in a media briefing yesterday morning, though the Aberdeen boss said reports that as many as 1,000 jobs were on the block were “grossly over-estimating” the risk. Standard Life has a workforce of around 5,000 in Scotland, mostly in Edinburgh, and 6,500 globally, while Aberdeen employs 800 of its 2,800 headcount in Scotland.

“We’re just not going to go down the road of [discussing] job cuts,” Mr Gilbert said. “This is, as Keith [Skeoch] said, about revenues [and] synergies as well. Obviously there is overlap but look, we just can’t talk about job losses.”

Mr Skeoch admitted that “there will be some synergies” as the two organisations are integrated, but declared that jobs could be created if the two companies’ long track record of growth is maintained. “At the end of the day, as we both indicated, this is a strategic deal,” Mr Skeoch said. “It’s a deal for the long-term. It provides a UK and Scottish powerhouse in asset management. And when we are successful, as I’m sure we will be, we will be generating good long-term growth and that will generate a substantial increase in jobs and opportunities for our people.”

The merger comes as active fund managers come under increasing price pressure from passive funds, with analysts raising the prospect of further consolidation taking place in light of the deal. It also comes amid a difficult run for Aberdeen, which has reported 15 consecutive quarters of net outflows from its funds. The investment house said there had been signs of recovery in its emerging market funds in the third quarter of 2016, which Mr Gilbert noted had been derailed after sentiment was unsettled by the Trump victory in November’s US election.

Keith Baird, financial services analyst at Cantor Fitzgerald, declared that “this looks like a defensive deal” in light of the challenges facing active managers from passive investing, pricing and regulatory pressures.

But Mr Gilbert, who underlined his faith in the long-term prospects for emerging markets, said that Aberdeen had not been placed under pressure from its biggest shareholders, Mitsubishi UFJ and Lloyds Banking Group, to do the deal. Noting that Aberdeen is carrying £500m in cash and still makes around £300m in annual profits, he declared: “We didn’t have to do the deal. We did it because we genuinely believe the combined company will be better.”

Both company leaders played down criticism from some quarters over the decision of Mr Skeoch and Mr Gilbert to become joint leaders of the combined group, which will see Aberdeen shareholders own approximately one third of the merged entity and Standard Life investors around two-thirds. Mr Gilbert, who observed that he has known Mr Skeoch for 30 years, said that it was “pretty prevalent” in financial services and global equities for companies to have joint chief executives. Mr Skeoch said: “One of the things that makes us both excited about the deal is absolutely the scale: £660 bn of assets, clients in 80 countries around the world. There is more than enough for us both to do.”

Colin Cieszynski, chief market strategist at CMC Markets, claimed it looked like a better deal for Standard Life than Aberdeen, noting that Aberdeen’s stock had dropped back below 300p after reaching 310p yesterday morning.

He added: “This suggests the street doesn’t expect to see another bidder and may not be happy that there is no premium and no cash component to this friendly deal, a sign that there wasn’t much demand for Aberdeen and that Standard probably got a good price for it.”