Shares in global asset manager Henderson Group have soared following the announcement it will merge with US-listed Janus Capital Group.
Henderson, which is listed on both the Australian and London bourses, surged as much as 14 per cent on the ASX on Tuesday following the overnight announcement of the merger.
The $US6 billion ($A7.8 billion) merger is expected to be finalised in the second quarter of 2017, with the combined group intending to trade on the New York Stock Exchange.
Motley Fool Australia director of research Scott Phillips said the merger was a good deal for Janus, which was able to swoop on Henderson shares that pushed down by what he called the market's overreaction to Brexit.
Mr Phillips said it was a smart move by both companies.
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"While they say 'it wasn't out of fear, it was out of strength', the reality is that they are looking to try and offset the relentless reductions in funds management fees and commissions effectively," Mr Phillips told AAP.
Morningstar analyst Stephen Ellis said the merger raised more questions than answers.
"At the very least, the deal increases the scale of the two firms' operations, which should help offset some of the pricing pressure we expect to see in the industry in the longer term," Mr Ellis said.
"But it remains to be seen whether it will improve their active management performance to the levels needed to be competitive."
Henderson shares retreated slightly from their early highs but were still up 47.5 cents, or 11.93 per cent, at $4.45 at 1500 AEST on Tuesday.
