The deal is the latest in a string of deals in the high-growth sector over recent years as firms look to scale up in the face of higher regulatory and technical costs.
Under the terms of the deal, which excludes Investec's Swiss and International wealth operations, Rathbones shareholders will own 58.75% of the combined group and 70.1% of the voting rights.
The deal would also see Investec enter into a long-term strategic partnership with Rathbones.
"Bringing Rathbones together with Investec W&I UK will create the UK's leading discretionary wealth manager with approximately 100 billion pounds of funds under management and administration," Rathbones Chair Clive Bannister said in a statement.
The companies said they would target annual run-rate cash synergies of at least 60 million pounds, driven by cost savings and higher net interest income, and the deal was expected to be accretive to underlying earnings per share in its first year.
"The transaction represents a real step-change and long-term opportunity for our UK wealth strategy, underscores our commitment to the UK wealth management market and enhances our UK business as a whole," said Investec CEO Fani Titi.
($1 = 0.8064 pounds)
(Reporting by Simon Jessop, Editing by Louise Heavens)
By Simon Jessop
