Brewin Dolphin has agreed to a £1.6 billion takeover offer from Royal Bank of Canada (RBC) in a deal that is expected to be completed in the third quarter this year, subject to shareholder and regulatory approval.
RBC will pay 515p in cash for each share in Brewin Dolphin, one of the UK’s largest wealth managers employing hundreds across its network of Scottish offices in Edinburgh, Glasgow, Aberdeen and Dundee. The offer is a 62 per cent premium to the group’s closing share price on Wednesday.
RBC expects “limited” job losses in “functional and administrative areas”, with London-headquartered Brewin Dolphin operating initially as a standalone division of RBC before it is combined with the Canadian group’s existing UK wealth management business. The British firm has nearly 2,200 employees with £59bn of assets under management as of December 31.
Its roots in Scotland date back to 1993, when Brewin Dolphin acquired the historic Bell Lawrie White stockbroking business from banking group TSB in a £7 million deal. Bell Lawrie’s origins dated back to the formation of the Edinburgh stock exchange in 1844.
The business, which continued to trade under the Bell Lawrie name until 2009, opened its first office in Glasgow in 1996. In 2006 it acquired the private client arm of what was then known as Aberdeen Asset Management.
READ MORE: Brewin Dolphin looks to increase growth with £40m placing
RBC said the combination of its UK wealth management business with that of Brewin Dolphin will take assets under management to about £64bn, making it the third-largest manager in the UK and Ireland.
Doug Guzman, head of RBC Wealth Management, said the UK is a key growth market for the Canadian group and Brewin Dolphin will provide an “exceptional platform to significantly transform” its business.
“By combining two highly complementary businesses, we will increase the depth and breadth of our services and position the combined business as a premier integrated wealth management provider to private and institutional clients," Mr Guzman said.
“Both management teams are excited by a shared vision of high-quality client service, client-centric culture and the exceptional growth opportunities that we can deliver together. We look to continue investing in the combined business and take it to greater heights."
Founded in 1864, RBC is a top 15 global financial services company listed on the Toronto and New York stock exchanges with a market capitalisation of approximately £121bn. Employing more than 88,000 people, it reported revenues of approximately £30.3bn during the year to October 31 and net income of £9.7bn.
For the year to September 30, Brewin Dolphin reported revenues of £405.9m and a pre-tax profit of £90.9m.
READ MORE: Fresh faces are set to take Brewin Dolphin to a whole new level
The management team at Brewin Dolphin is expected to remain in place post-acquisition. Chief executive Robin Beer said directors see additional growth opportunities under RBC ownership, particularly through product diversification and acceleration of digital development.
“The Brewin Dolphin board is pleased to recommend the offer by RBC in the interests of our
shareholders, our clients, our people and our business partners,” Mr Beer said. “Building on the strong organic growth that we have achieved to date, the combined business will create an attractive platformfor future growth.
“As part of RBC we would be able to provide our clients with a broader range of products and services, and expand our distribution channels through leveraging RBC's global presence.”
David Thomas, head of international wealth management at RBC, added: “This is a transformative acquisition for RBC Wealth Management and cements RBC’s position as a market leader across multiple business platforms in the UK, the Channel Islands and Europe."
Share in Brewin Dolphin closed 194p higher yesterday at 512p, a gain of 61%.
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