Ameriprise Buys Asset Management Unit from BofA

September 30, 2009 ( - Bank of America Corp. has agreed to sell the stock and bond mutual fund business of its Columbia Management unit to Ameriprise Financial, Inc. for as much as $1.2 billion, the Wall Street Journal reports.

Ameriprise says that once the transaction closes in the spring, its asset management business will have global assets under management of nearly $400 billion and become the eighth-largest U.S. manager of long-term mutual funds, according to the news report. Bank of America agreed to proceed with the sale although it raised the $33.9 billion mandated by bank regulators after the government conducted a stress test of the nation’s biggest banks earlier this year.

Columbia’s long-term asset-management business, which includes the Columbia mutual funds and other private assets managed by Columbia, had about $165 billion in equity and fixed-income assets under management as of June 30, according to the Journal. The bank will retain Columbia’s cash-management business.

The acquisition is expected to begin adding to Ameriprise’s earnings and return on equity within a year, excluding integration costs. The total to be paid to Bank of America is expected to be between $900 million and $1.2 billion, based on net asset flows.

Ameriprise Chairman and Chief Executive Jim Cracchiolo said the deal “transforms our asset-management business, a core component of our integrated-business model, and will significantly accelerate our growth,” according to the news report.

The official announcement of the deal is available  here .