The €98bn asset manager F&C is to be taken over by BMO Europe, a subsidiary of the Canada-based Bank of Montreal, which intends to improve its foothold in Europe through the acquisition.
On Monday, the shareholders of the Scottish asset manager voted in favour of a cash takeover for 120 pence (€1.44) a share, resulting in a total amount of £708m (€848m), F&C confirmed.
According to Richard Wilson, F&C’s chief executive, BMO has emphasised that “it doesn’t expect that the deal will result in any material changes to F&C’s investment processes or investment team”.
“The acquisition creates a global advantage for our clients and represents a unique opportunity in terms of products, and geographical and cultural fit of two growth-focused asset management businesses,” he said.
“F&C gains the strength of BMO’s strong balance sheet and diversified business lines, and we envisage the growth, with BMO, of a successful worldwide asset management business.”
Ben Kramer, executive director at F&C Netherlands, added that both companies were complementary in terms of geographic activities, clients and offered products and services.
“The takeover is aimed at growth, and not primarily at cost-cutting through synergy,” he said.
F&C’s activities will become embedded in the organisation of BMO Financial Group, a €384bn financial services provider active in Canada and the US.
Currently, the asset management activities of BMO Europa are limited to London-based Lloyd George Asset Management and Pyrford International.
The acquisition is to be completed after a court hearing scheduled for 7 May.
At the end of 2013, F&C reported assets under management of €98bn, down from €114bn in 2012, and with more than 80% of its AUM stemming from European institutional clients.
In other news, Standard Life Investments (SLI) has confirmed its £390m acquisition of Ignis Asset Management, as consolidation in the market continues apace.
Confirmation of talks between SLI and Ignis’s parent, Phoenix Group, surfaced earlier this week.
The deal, which is to be funded through parent insurer, Standard Life’s internal cash resource, will also see an arrangement between SLI and Phoenix for asset management.
Through a strategic alliance with Phoenix Group, SLI will now also provide services to Phoenix’s Life Company subsidiaries, including the potential to manage future books of assets that Phoenix may acquire.
The acquisition of Ignis, which has around £69bn in AUM, will achieve around £50m in cost savings after intergration, SLI said.
Keith Skeoch, chief executive at SLI, said: “Continuity of investment performance and commitment to client service and relationship management remain our key priorities.
“Migration and integration of Ignis will take place in a controlled manner under unified management from day one.”
Chris Samuel, chief executive at Ignis, added: “SLI will inherit a strong range of products and investment capabilities and a group of talented individuals who will be an asset to the merged business.”
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