Zurich Financial Services has found a buyer for its UK-based Threadneedle unit. American Express will pony up 340 million pounds ($566.5 million) in cash for the unit, according to press reports. When the unit was first put on the block, some reports said the price could have reached as high as $855 million. The deal marks American Express first major foray outside of the US.

Threadneedle is the UK's third largest asset manager with some 44 billion pounds in assets under management. The deal is scheduled to close in the fourth quarter if approved by regulators. The Threadneedle organization will retain its name and will continue to be led by Simon Davies, Threadneedle CEO, and the existing management team. Davies will report to Jim Cracchiolo, group president, Global Financial Services and chairman and chief executive officer, American Express Financial Advisors.

Threadneedle will continue to manage certain assets for Zurich Financial Services U.K., which comprise a substantial portion of Threadneedle's assets under management, for an initial term of up to eight years, according to an American Express press release. The UK manager will also maintain its relationship with Zurich's U.K. distribution network, which will continue to have access to Threadneedle investment products and services.

"The decision to acquire Threadneedle is part of our overall strategy to expand our financial services business globally," said Cracchiolo. "Threadneedle complements the American Express Financial Advisors business, which provides financial planning and advice to more than 2 million U.S. clients, and American Express Bank, which operates in 42 countries and provides mainly private and retail banking services. We see tremendous potential for long-term growth in the European asset management market, and by adding Threadneedle to our global asset management businesses American Express will be well-positioned to capitalize on this opportunity." 

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