Man Group plc will buy GLG Partners for $1.6 billion in cash and stock, creating a massive hedge fund with $63 billion in assets worldwide.

Man Group said Monday that it will pay $4.50 per share for each GLG stock, a 55 percent premium to GLG's closing price on Friday.

The U.K. firm will also exchange 1.0856 of its shares for each share held by three GLG principals, a value of about $3.50 per share that will be capped at $4.25 per share.

The deal is expected to close by the end of September.

Man Group said the acquisition should generate savings of $50 million a year.

GLG, based in New York, manages nearly $24 billion in assets.