BlackRock to acquire Barclays Global Investors for $13.5 billion

12 June 2009

US investment manager BlackRock Inc has agreed to acquire the asset management arm of British investment bank Barclays Plc for $13.5 billion in cash and stock, to become the world's largest asset manager.

Barclays, which had turned down the UK government's bail out money to recapitalise banks in favour of a Mid East investment from Sheikh Mansour bin Zayed al-Nahyan, member of the Abu Dhabi ruling family, had been in talks with private equity investors including CVC Capita and BlackRock for the sale of its asset management business, Barclays Global Investors (See: Barclays in talks with BlackRock to sell BGI for approximately $13 billion).  

The board of directors of Barclays Global has accepted a binding offer of $13.5 billion (£8.2 billion) by BlackRock.

New York-based BlackRock will pay $6.6 billion in cash and 37.8 million shares currently worth about $6.9 billion, giving it an economic interest of approximately 19.9 per cent of the enlarged BlackRock Group, which would be renamed BlackRock Global Investors said

Barclays Global Investors had approximately $1.5 trillion of assets under management as of 31 December and 3,000 institutional clients. The takeover will create a firm with combined assets under management of more than $2.7 trillion and a market capitalisation of more than $34 billion.

Barclays said the BlackRock offer is superior to the transaction agreed with the CVC Capital Partners Group firm Blue Sparkle LP and unless Barclays receives a matching offer from CVC by the end of Thursday 18 June 2009, the Barclays board will accept the BlackRock offer and recommend it to Barclays shareholders for approval at a general meeting to be called for the purpose.