Macquarie To Acquire US Asset Management Firm

Post by Sharat on August 20, 2009 · Under Business News, Capital Markets, Company News, International Business News, Mergers & Acquistions, banking · Comment

Australian investment banking major Macquarie Group will acquire US asset manager Delaware Investments from Lincoln Financial Group in a deal valued at $516 million.

Macquarie said that it would provide the asset manager with additional capital to finance growth, though it did not say how much funding it intends to provide.

“Upon completion of the transaction, the combined assets under management of Macquarie and Delaware are expected to be over $US300 ($A361) billion,” Macquarie said in a statement to the Australian Securities Exchange (ASX).

“We have a high regard for the Delaware team and are delighted to have them join us. Delaware will form a key element of Macquarie Funds Group’s offering to our clients globally and will significantly enhance our existing North American asset management activities,” Macquarie Funds Group global head Shemara Wikramanayake said.

Funds for the purchase will be provided by Macquarie Bank Ltd (MBL).

“MBL’s Tier 1 capital ratio is anticipated to decrease by approximately 1.2 per cent as a result of the transaction,” the company said.

The deal is expected to be completed by the end of the year subject to regulatory approval and closing conditions.

Industry analysts say that the investment bank continues to carry surplus capital and more than enough financial muscle to fund this and future acquisitions.

Analysts expect the fund management industry to continue consolidating in the wake of BlackRock’s US$13.5 billion acquisition of Barclay’s asset management unit.

Macquarie has a history of using depressed market valuations to make predatory acquisitions. In 1999 it purchased Bankers Trust’s (BT) Australian operations, and again in 2004 acquired the Asian equities business of ING Group.

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