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Aberdeen Asset Management announced on Tuesday that its European property subsidiary, Aberdeen Property Investors (API), is acquiring Goodman Property Investors, the largest independent property fund manager in the UK, from the Goodman Group for EUR 130mln. Aberdeen's CEO Martin Gilbert said the deal, which is dependent on approval of the UK's Financial Services Authority, will transform Aberdeen into the second largest real estate fund manager in the UK and one of the top 10 in the world.

API has agreed to pay an initial £89mln (EUR 113mln) for GPI, plus 'an amount linked to the value of GPI's net assets', which is expected to come to about £8.4mln. In addition, Aberdeen is to pay a deferred consideration of up to £12.5mln, dependent on GPI's assets under management (AUM) over the next 24 months. GPI had an AUM in excess of £7bn at end-March 2008.

Aberdeen said API is largely invested in Continental Europe, with the UK accounting for only a small proportion of the overall AUM. The acquisition of GPI, Aberdeen said, gives API 'significant critical mass in the important UK market'. In addition, the deal will result in an increase of over 42% in API's AUM to approximately £24bn.

Earlier this year, Aberdeen completed the acquisition of German fund manager Degi from Dresdner Bank for EUR 110mln.

That Goodman Group, an industrial property specialist, decided to sell GPI is significant as the Australian group has spent over A$3bn from 2005 to 2007 to build up a UK and European platform. Explaining the move, Greg Goodman, CEO of the Goodman Group, said: 'Since the acquisition of GPI in 2005, we have continued to grow our fully integrated, specialist business space customer service model both organically and via acquisitions. We have a robust European platform with great continued growth potential for both logistics and business parks and the European region remains fundamental to our business model, with Europe contributing a high proportion of Goodman's earnings.

'As part of ongoing operations we conducted a strategic review for GPI in 2007. We concluded that the best way to optimise value for the underlying investors in the GPI platform was to combine with a strong specialist with a highly complimentary business model. Aberdeen was a highly strategic fit and was viewed as the best long term owner of GPI. We are pleased to announce this transaction as it represents a successful conclusion to our 2007 strategic review.'

Intelli Corporate Finance Limited is acting as financial adviser to Aberdeen. On completion, GPI will change its name to Aberdeen Property Investors.