BlackRock buys Barclays GFI for 13.5 bln dollars

By AFP

July 15, 2010 Updated Jun 14, 2009 at 9:41 PM CDT

US money manager BlackRock bought Barclays Global Investors, the investment arm of British bank Barclays, for 13.5 billion dollars, BlackRock said in a statement.

The purchase -- including BGI's market-leading ETF platform, iShares -- the New York-based investment group said, would create a firm managing assets worth some 2.7 trillion dollars.

In the deal, BlackRock would acquire BGI for 6.6 billion dollars cash and 37.8 million shares of common and common equivalents.

"The shares will represent a 4.9 percent voting interest and an aggregate 19.9 percent economic interest in the combined firm, which will be renamed BlackRock Global Investors," the statement read.

"The combination of BlackRock and BGI would bring together market leaders in active and index strategies to create the preeminent asset management firm operating under the name BlackRock Global Investors ("BlackRock")," the company said.

The transaction "would create an independent and fully integrated asset management firm with combined assets under management of over 2.7 trillion dollars."

The transaction is still subject however to approval by Barclays shareholders, client consents, regulatory approvals and customary conditions, BlackRock said.

Barclays in April agreed to sell iShares to private equity group CVC Capital Partners for 4.4 billion dollars to help the bank avoid having to join a government insurance scheme for risky assets.

However Barclays has the right to break the deal and sell to a third party up until late June.

The firm's products "will include equities, fixed income, cash management and alternatives, and will offer clients diversified access to global markets through separate accounts, common trust funds, mutual funds, ETFs, hedge funds, and closed-end funds," the statement read.

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