LONDON Fund manager Schroders (SDR.L) said on Monday it would pay 424 million pounds ($646 million) to buy Cazenove Capital in an agreed deal that would create a leading independent private banking and wealth management business.
Schroders, which announced that the two were in talks only on Friday, said under the agreed deal Cazenove shareholders would receive 135 pence in cash per ordinary share.
The 200-year old Cazenove had had until April 19 to decide on the offer.
"This is a transaction which delivers attractive value for our shareholders and, importantly, will also lead to clear benefits for our clients and improved opportunities for employees," Chief Executive of Cazenove Capital Andrew Ross said in a statement.
The deal, which will bring two of the City of London's oldest names together, will result in the combined group having pro-forma assets under management in private banking and wealth management as at 31 December 2012 of 28.4 billion pounds.
Cazenove, established in 1823, grew to become one of the top stockbrokers for the well-heeled of London by the 1940s, and has reportedly counted Queen Elizabeth II among its clients.
The fund management arm was split from the wider group after JP Morgan (JPM.N) formed a joint venture with Cazenove's UK investment banking business in 2005.
Traditionally one of the least acquisitive of the larger UK asset management houses, Schroders has made small add-on deals recently. In December it said it had agreed to buy U.S.-based STW Fixed Income Management.
"I am confident the transaction will create long-term value and benefits for clients, shareholders and employees," Chief Executive of Schroders Michael Dobson said.
($1 = 0.6562 British pounds)
(Reporting by Kate Holton; editing by Matt Scuffham)