GLOBAL – Merrill Lynch is to sell its asset management arm Merrill Lynch Investment Managers to BlackRock for a gain of around $1.1bn (€923m).
MLIM president and chief investment officer Bob Doll will become a vice chairman and CIO of global equities at the merged operation, in which Merrill will retain a 49.8% stake. The new outfit will operate under the BlackRock name and have around $1trn in assets under management.
BlackRock CEO Laurence Fink will be chairman and CEO while Ralph Schlosstein will continue as president of the new firm, which will have more than 4,500 staff.
Andrew Dyson, head of European institutional marketing for MLIM, declined to comment on the deal and its potential impact on clients such as the outsourcing deal with Philips.
IPE understands BlackRock only has around 40 employees outside the US, so MLIM's European operations may well be able to continue unaffected.
“Joining forces with Merrill Lynch Investment Managers represents a truly transformational opportunity – the combined company will have broad investment and risk management capabilities and extraordinary global scale that will enhance our collective ability to serve individual and institutional investors worldwide,” Fink said in a statement.
“MLIM and BlackRock are highly complementary, in terms of both expertise and culture. Together, we will benefit from a singular focus on investment and risk management, as well as a deep pool of talented professionals who share a commitment to teamwork, excellence and integrity.”
They would “move quickly” to establish a robust operating platform to ensure a seamless transition clients.
“Having an expanded presence in the asset management business has been a strategic priority for Merrill Lynch for some time,” said Merrill’s chairman and chief executive Stan O’Neal.
“By merging MLIM with BlackRock, Merrill Lynch will realize a major objective – the transformation of our asset management unit into a major component of what we believe will be one of the world’s pre-eminent, diversified global money management organizations.
“We will gain what amounts to a half-interest in a firm twice the size of our unit, with enhanced growth prospects, both organically and through potential acquisitions, with its own publicly traded stock.”
The transaction, which has been approved by the boards of directors of both companies, is expected to close in the third quarter of 2006.