Barclays accepts BlackRock investment deal

17 June 2009 / by Rebecca Sargent
Barclays has today announced the acceptance of BlackRock's offer to buy its fund management arm BGI (Barclays Global Investors).

The £8.2billion deal has been given the go ahead after much to-ing and fro-ing between Barclays, BlackRock and a separate bidder – CVC Capital Partners.

CVC Capital Partners had previously offered to buy Barclays' iShares division for $4.4billion, but Barclays had until June 18 to 'go-shop' for a better offer. That offer came in the form of the £8.2billion from BlackRock for the bank's entire investment arm, BGI.

Having failed to make an appealing counter offer, CVC Capital Partners has agreed to terminate the proposed transaction, but Barclays must pay £106million in severance fees.

The deal now awaits approval from Barclays shareholders at a general meeting that is to be held in early August 2009.

In a statement on the deal, BlackRock said: "As one, BlackRock and BGI will have a world-class product offering across the risk spectrum to bring an even greater solutions-centered approach to retail and institutional clients.

"BGI's record of product innovation, risk analytics and leadership in quantitative investing, indexing, and retirement solutions will complement BlackRock's expertise in active fund management, tailored solutions, innovative culture and risk management via BlackRock Solutions."

BlackRock will be funding the deal through both cash and shares, and expects it to be completed in quarter four this year.

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