BLACKROCK HAS agreed to pay $13.5 billion (€9.6 billion) in cash and shares to buy Barclays Global Investors in a deal that will make the US money manager the biggest in the world – with more than $3,000 billion in assets under management.
Under the deal, Barclays will wind up owning nearly 20 per cent of BlackRock, while Bank of America’s existing stake – acquired as part of its purchase of Merrill Lynch – would drop to just under 35 per cent from the current 49 per cent.
John Varley, Barclays chief executive, said in a statement on Friday: “We believe that the proposed transaction is a very good one for our shareholders. We would realise immediate and substantial value for BGI and create material economic exposure to a highly competitive global asset manager through two channels: a substantial equity participation in BlackRock, and the ongoing commercial relationship between Barclays and the new business.”
Shares in Barclays were 3.8 per cent lower at 293p in afternoon London trading.
The deal marks a milestone in BlackRock’s transformation from a specialised fixed-income fund manager to a diversified asset manager with capabilities in debt and equity, as well as in active and passive fund management.
The purchase price will include $6.6 billion in cash and the rest in shares. Barclays put the total value of the offer at $13.5billion. BlackRock planned to finance the deal with a combination of debt – including $2 billion from Barclays – and $2.8 billion in equity from several sovereign wealth fund investors.
