Financial services company AMP Capital will sell its global equities and fixed income (GEFI) business to Macquarie Group’s asset management arm in a deal worth up to $185 million.
Macquarie Group (ASX: MQG; ADR: MQBKY) announced today it had entered into a binding agreement to acquire AMP’s GEFI business, which currently manages approximately $A60 billion in assets for AMP Australia as well as external institutional, retail, and direct clients.
Assets managed by Macquarie will rise to $720 billion once the deal is finalised, according to a statement.
Head of Macquarie Asset Management Ben Way said the transaction represented another opportunity, following their recent acquisition of Waddell & Reed, to add scale and expand its public investment capabilities.
“It cements Macquarie’s position as the leading investment manager in Australia by (assets under management), and provides new clients joining us from AMP Capital with access to Macquarie’s diversified investment offerings and global platform,” Mr Way said.
“Clients will be at the centre of our considerations as we work closely with AMP on a successful integration.”
Acting Chief Executive Officer of AMP James Georgeson said the deal brought together two well-known Australian investment businesses with strong track records.
“Our review of the GEFI business last year showed it had strong capabilities and performance but needed greater scale to compete effectively,” Mr Georgeson said.
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“Macquarie is a high quality and respected manager, with a complementary culture and capabilities, well-placed to develop the business and deliver continued strong investment performance for its expanded client base.
“We are committed to working with Macquarie to integrate and transition our clients and teams, and to exploring new partnership opportunities to enhance the products and services we both provide to our clients.”
The transaction consideration values GEFI at up to $A185 million, comprising a base payment of up to $A110 million in cash and a cash earn-out of up to $A75 million payable after the second anniversary of transaction completion.
Final terms are subject to meeting revenue targets. The transaction is expected to close in the first quarter of 2022, subject to customary closing conditions.