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 .
« J.P. Morgan Launches Portfolio Construction Tool