UK - Deutsche Bank has signed an agreement with Aberdeen Asset Management to sell parts of its UK and Philadelphia-based asset management businesses for up to £265m.
Businesses included in the sale are largely the former Morgan Grenfell Asset Management operations, which were acquired by Deutsche Bank in 1989. As at 31 May 2005 DeAM’s UK operations had assets under management of £46.3bn with annualised run-rate management fees at that date of £119.3m.
The Philadelphia-based active fixed income business is also included in the deal. As of 31 May 2005, the Philadelphia fixed income business had £11.7bn in assets under management, generating £30.5m in annualised run-rate management fees. The Philadelphia fixed income business generated net business inflows of £0.2bn in 2004.
DeAM’s UK-based hedge fund and real estate businesses and its Philadelphia-based high yield business do not form part of the sale and remain key and integral parts of DeAM’s global platform.
“The objective is to create a stronger, more focused DeAM business that can provide greater value to our clients and shareholders,” said Kevin Parker, global head of DeAM.
Aberdeen chief executive, Martin Gilbert, called the deal a “transformational acquisition,” adding that it would substantially increase the manager’s scale and diversity of revenue streams.
He added: “Our strategic position as an independent, focused fund manager will provide the right platform to release the value inherent in these businesses. The acquisition will enable us to provide a significantly enhanced product offering to our clients.
“We are also well placed to improve the performance of these businesses working in conjunction with the high quality teams who will be joining the group.”
Aberdeen will pay Deutsche Asset Management up to £165m in cash on completion in respect of the London fixed income, Philadelphia fixed income and OEIC businesses, plus an amount equal to the net asset value of the DeAM at completion, expected to be between £35m and £55m.
Aberdeen said it would purchase the business with a £215m rights issue underwritten by JPMorgan.
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