Man Group on Monday said it has agreed to buy one of its biggest rivals, GLG Partners, in a cash-and-shares deal valuing GLG at $1.6bn (€1.3bn) to create a hedge fund giant managing $63bn across a range of hedge fund and traditional stock investment strategies.

The deal marks a major strategic move for Man Group, which has been weighed down by poor performance at its largest investment unit, AHL, and had said it was on the hunt for acquisitions that would diversify its revenue streams.