Bank of America Corp. (BAC) agreed to sell the long-term asset
management business of its Columbia Management unit to Ameriprise
Financial Inc. (AMP) for as much as $1.2 billion.
Once the transaction closes in the spring, Ameriprise's
asset-management business will have global assets under management
of nearly $400 billion and become the eighth-largest U.S. manager
of long-term mutual funds, it said.
The long-term asset-management business had about $165 billion
in equity and fixed-income assets under management as of June 30.
The deal will produce up to $150 million in annual net synergies,
with about half of the savings expected to be realized in the first
year, Ameriprise said. The acquisition is expected to begin adding
to Ameriprise's earnings and return on equity within a year,
excluding integration costs, it said.
In premarket trading, Bank of America shares rose 0.9% to $17.31
while Ameriprise climbed 3% to $33.30.
The total to be paid to Bank of America is expected to be
between $900 million and $1.2 billion, based on net asset flows,
Bank of America said.
Ameriprise Chairman and Chief Executive Jim Cracchiolo said the
deal "transforms our asset management business, a core component of
our integrated business model, and will significantly accelerate
our growth." The combined business will serve a broad range of
investors.
Bank of America said in May it planned to sell nonstrategic
assets, including Columbia Management, as part of its plan to raise
capital levels.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com
