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BlackRock to buy Barclays Global Investors for USD13.5bn

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BlackRock, Inc is to acquire Barclays Global Investors (BGI), including its market-leading ETF platform, iShares, from Barclays PLC for USD13.5bn.<
BlackRock, Inc is to acquire Barclays Global Investors (BGI), including its market-leading ETF platform, iShares, from Barclays PLC for USD13.5bn.

The deal will see BlackRock pay USD6.6bn in cash and the rest in stock for BGI, according to a statement issued by the New York-based firm. Barclays will hold a 19.9 per cent stake in the new combined company, which will operate under the name BlackRock Global Investors. Financing for the deal includes USD2.8 billion from the sale of equity to institutional investors and as much as USD2 billion in loans from Barclays and other banks.

BlackRock Global Investors will become the world’s largest money manager with over USD2.7 trillion in assets under management. 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.

At the closing of the transaction, which is expected to occur in the fourth quarter, Barclays will hold a 19.9 per cent economic interest in BlackRock Global Investors and a 4.9 per cent voting interest with restrictions on the sale or acquisition of shares. It will have the right to maintain its ownership percentage if BlackRock issues additional shares in the future.

‘We are incredibly excited about the potential to significantly expand the scale and scope of our work with investors throughout the world,’ says Laurence D. Fink, BlackRock Chairman and CEO. ‘The combination of active and passive investment products will be unsurpassed, and will enhance our ability to offer comprehensive solutions and tailored portfolios to institutional and retail clients.’

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