The merger will shore up the reputation of ABN Amro's asset management arm, which has been looking for a deal ever since the shock departure of Nigel Thomas and George Luckraft, their two star fund managers.
"This deal gives us a more secure and stable platform from which to grow our business," Derek Stuart, one of the founders of Artemis, told EuroWeek.
Under the deal, ABN Amro Asset Management will own 58% of the new company, which will continue to be called Artemis. Artemis's management team, led by chief executive Mark Tyndall, will run the business.
When Thomas and Luckraft resigned from ABN Amro in April, they agreed to work a 12 month notice before moving to their jobs at Framlington. However, just a few weeks later the two left ABN Amro, claiming that conditions had changed and that it had become impossible to work at the fund manager.
The result was that investors started to lose confidence in the asset manager, and about £90m of mandates were withdrawn. "ABN Amro had to find some more fund managers, or make an acquisition to strengthen its business," said a spokesperson for the fund manager.
ABN Amro and the two fund managers are now waiting for a court hearing, scheduled for mid-July, to decide what will happen.
Artemis was set up by four fund managers - Mark Tyndall, John Dodd, Derek Stuart and Lindsay Whitelaw - who had previously worked together at Ivory & Sime.
"Having managed a considerable amount of money at Ivory & Sime, we have no concerns about taking opportunities to grow our assets under management," said Stuart.
Artemis was approached last year with a takeover offer from boutique New Star Asset Management, but it was rejected because the Artemis management wanted to retain control, and were fearful of the influence that New Star chairman John Duffield might have tried to exercise over the company.