The merged business, which upon completion will be named Tilney Smith & Williamson, will have over £45bn of assets under management and will retain the accounting division, handling tax, audit, accounting and business advisory services.

Smith & Williamson shareholders will receive £625m, through a combination of cash and shares in the enlarged group, while Smith & Williamson management shareholders will be rolling the majority of their investment into the equity of the enlarged group.

The transaction values the combined business at approximately £1.8bn. The combined business will have revenues of an estimated £500m and earnings before interest, tax, depreciation and amortisation (EBITDA) of £150m.

The transaction is expected to complete in early 2020, subject to regulatory approvals.

The board of Tilney Smith & Williamson will comprise representatives from both firms. The chairman of the merged business will be Will Samuel, who is the current chair of Tilney, and Tilney chief executive Chris Woodhouse will become group chief executive.

Kevin Stopps and David Cobb, joint CEOs of Smith & Williamson, will join the board of the enlarged group upon completion. Further details of the combined board will be announced in due course. 

From left to right: Kevin Stopps, Chris Woodhouse and David Cobb

Smith & Williamson, which was founded in Glasgow in 1881, is ranked at number eight in the Accountancy Daily Top 75 Firms annual survey. Its financial results, released in July, showed operating income increased 4.3% year-on-year to £278.1m while adjusted operating profit increased by 4.8% to £48.4m.

Established in 1836, Tilney specialises in investment management and is a market leader in financial planning, with the Bestinvest digital investment platform.

The firms, which first began discussing a merger in August this year, stated they operate businesses that are highly complementary in the services they offer, the range of clients they serve and in their geographic presence. The plan is to ‘create a unique and differentiated client proposition, covering professional services, financial planning and investment management’.

The combined group will have an expanded office network across 36 locations in the UK, Ireland and the Channel Islands. It will have approximately 280 investment managers, 260 financial planners and a professional services business with 150 partners and directors. 

David Cobb and Kevin Stopps, co-chief executives of Smith & Williamson, said: ‘The investment management and professional services market is changing rapidly, with the evolution of client needs accelerating.

‘The combination of our two businesses creates real scale, broader capabilities and complementary service offerings, enabling the merged group to enhance existing client relationships and win a higher share of new business opportunities. We look forward to working with Tilney’s management to complete the transaction and bring the two companies together.’