Schroders Plc said on Thursday that it has agreed to be taken over by US investment manager Nuveen in a £9.9bn deal.
Under the terms of the acquisition, Nuveen - which is part of the Teachers Insurance and Annuity Association of America - will pay 612p per share.
The price comprises a cash consideration of 590p a share and permitted dividends of up to 22p per share. The cash consideration is a 29% premium to the closing share price on Wednesday.
The deal will create one of the world's largest global active asset managers, with nearly $2.5 trillion of assets under management across institutional and wealth channels.
Schroders chief executive Richard Oldfield said: "In a competitive landscape where scale can help deliver benefits, in Nuveen we see a partner that shares our values, respects the culture we have built and will create exciting opportunities for our clients and people.
"The transaction will significantly accelerate our growth plans to create a leading public-to-private platform with enhanced geographic reach and a strengthened balance sheet. Together, we can create an exceptional opportunity to provide clients with a true breadth of high-quality solutions to meet their evolving needs."
News of the takeover came alongside Schroders' annual results, which showed that assets under management rose 6% in the year to the end of December 2025 to a record £823.7bn.
Statutory pre-tax profit was 21% higher at £673.8m and adjusted operating profit rose 25% to £756.6m.
The asset manager highlighted £11.2bn of net new business, versus net outflows of £10.8bn a year earlier. This marked a return to organic growth, achieved through improved flows from intermediary and institutional clients.
At 0955 GMT, the shares were up 28.3% at 586.50p.
Dan Coatsworth, head of markets at AJ Bell, said: "Schroders has been listed in London since 1959 and is among the biggest UK-quoted asset managers.
"It is the second FTSE 100 member to receive a takeover bid so far in 2026. The 34% bid premium including dividends is below the 44% average year-to-date and there may be grumbles from shareholders the takeout price is not generous.
"Unfortunately for disgruntled shareholders, there's not a lot they can do in this situation. The Schroders family own approximately 45% of the business and they've indicated support for the bid at the current price. What they say goes in this situation, given the scale of their voting power."
Susannah Streeter, chief investment strategist at Wealth Club, said: "The mega takeover of Schroders by US institutional investor Nuveen demonstrates how overseas players are sniffing out untapped value in UK companies. The acquisition will create an asset management behemoth and, thanks to the decision to locate the merged company in London, adds shine to the City's reputation as a leader in global asset and wealth management.
"However, with yet another big name turning private, it will be a blow to the London Stock Exchange. With global whales swallowing big fish in the UK pond, it limits the availability of listed assets for funds. This is partly why private market opportunities are increasingly attractive, given that opportunities to invest in listed companies are declining.
"This will go down as a week of huge upheaval for the UK asset management landscape, with this mega deal arriving just as valuations had taken a hit over worries about AI disruption. This takeover demonstrates the allure UK assets hold and has helped boost shares in other wealth managers and banks. There's also been a fair amount of bargain hunting after yesterday's dramatic falls."
Shares in London-listed wealth managers tumbled on Wednesday after US wealth platform and custodian Altruist unveiled a new AI tax planning tool.
The new tool, named Hazel, helps advisors create fully personalised tax strategies for clients by reading and interpreting their 1040s, paystubs, account statements, meeting notes, emails, and custodial and CRM data, and applying deep tax logic to the analysis.