Henderson Global Investors plans to merge with US fund manager Janus Capital.
The combined company would hold more than $320bn of assets under management.
Henderson said the merger would give greater scale and a wider range of funds and strategies across all asset classes and sectors.
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The merger would need to be approved by shareholders and regulators but could be completed in the second quarter of 2017.
Janus said its largest shareholder, Dai-ichi Life, supported the merger. The two chief executives will run the new company together.
Andrew Formica, chief executive of Henderson, said: “Henderson and Janus are well-aligned in terms of strategy, business mix and most importantly a culture of serving our clients by focusing on independent, active asset management.”
Janus chief executive, Dick Weil, said: “This is a transformational combination for both organizations.
“Janus brings a strong platform in the US and Japanese markets, which is complemented by Henderson’s strength in the UK and European markets.”
