New York, June 12: BlackRock (NYSE: BLK) announced Thursday that it has agreed to acquire Barclays Global Investors (BGI) and the iShares ETF platform from the British banking giant Barclays PLC (NYSE: BCS) in a cash and stock deal worth nearly $14 billion.
BlackRock will acquire the business in exchange for $6.6 billion in cash and 37.7 million shares of common stock. The firm will be renamed BlackRock Global Investors with Barclays holding a 19.9 percent stake in the combined company.
Benefits for BlackRock
The deal will transform BlackRock into a money management juggernaut with more than $2.7 trillion worth of assets.
The transaction, being termed as the most aggressive that BlackRock has made in its 21-year history, will enable the ‘ubiquitous on the Wall Street’ firm leapfrog and become the world’s largest money manager.
Laurence D. Fink, BlackRock’s chairman and chief executive officer, said of the purchase, “This will bring the greatest sweep of products to our clients. This transaction is transformational. The deal just brings products together that no one else could offer.”
BlackRock may not be a household name and may be little known outside financial circles, but the company is considered as one of the best-run Wall Street firms. One of the world's biggest publicly traded investment management firms, it has employees in 21 countries throughout the U.S., Europe and Asia Pacific.
Founded in New York in a one-room office in 1988, BlackRock has 5,300 employees on its pay rolls. The company was one of the few that could buck the trend of dismal financial results and produced a profit of $786 million on $5 billion of revenue.
The firm, in which Bank of America holds a 47 percent stake, not only offers long-established services like managing people's money, but also offers business solutions to government clients, corporations and banks.