CEO Larry Fink
and Barclays president Robert Diamond
first talked about a possible deal six or seven years ago, but the pair decided that the timing wasn't right,
The New York Times
Thursday night, BlackRock announced it was buying Barclays Global Investors
in a cash and stock deal valued at $13.5 billion, a transaction that would create
an asset management firm with $2.7 trillion of assets.
"This is a once in a lifetime opportunity to put two firms together that have 80 percent or 90 percent complements and very little redundancy," Fink was quoted
Wall Street Journal
The combined firm, which will be named BlackRock Global Investors
, will have a market
value of more than $34 billion, and the transaction will add to per-share cash earnings by 10 percent
quoted Fink as saying in a conference call.
Bank of New York Mellon
was reportedly the other main bidder for BGI, and according
to Bloomberg, BlackRock won out in part because its stock price went up 36 percent
this year, versus a gain of 2.2 percent in BNY Mellon's stock.
BlackRock is acquiring BGI in exchange for $6.6 billion in cash and 7.8 million shares of common and common equivalents in BlackRock.
A group of banks, including Barclays, Citi and Credit Suisse, has committed to provide BlackRock with a new 364-day
revolving credit facility of up to $2 billion. BlackRock also received commitments from institutional investors to buy 19.9
The Financial Times
reported that those investors would include the Kuwait Investment Authority,
Government of Singapore Investment Corporation and and China Investment Corporation.
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