Perpetual Limited (ASX:PPT) and Pendal Group Limited (ASX:PDL) are expected to update the market this week about their merger talks, with a deal to create a new $3.5 billion-plus Australian listed investment manager increasingly likely. The pair are understood to have agreed to a merger in principle, and were finalising due diligence and contracts at the weekend. Perpetual boss Rob Adams has recently been spekaing to investors in Britain about the merger or another possible acquisition target in the northern hemisphere, should the Pendal merger plan not progress.

Expectations are that the transaction will involve cash and scrip with the new entity half-owned by Perpetual and half-owned by Pendal.