ING Sells Baring Asset Management to MassMutual, Northern Trust

November 22, 2004 ( - ING Group has split and sold its Baring Asset Management unit, with the Financial Services Group going to Northern Trust and the global investment-management group going to MassMutual Financial Group.

The total cost of the sale was not released, but ING said that the combined result of the two transactions will result in a net gain of approximately €250 million  for the bank, according to the Wall Street Journal (WSJ). The company expects that the move will also positively impact the company’s debt-to-equity ratio. The transaction are still subject to regulatory approval, but is expected to be completed by the end of the first quarter of 2005, according to the companies involved.

The Financial Services Group, which offers fund administration, custody and trust services, will transfer all 770 employees to Northern Trust, according to ING. The group, which as of September 30 had $63 billion in funds under administration, $28 billion in custody, and $32 billion in trust assets, will complement Northern Trust’s fund services capabilities, according to the company. Northern Trust currently has offices in London, Dublin and Luxembourg. The move will cost Northern Trust approximately $480 million, according to the WSJ.

Northern Trust expects the acquisition to dilute the price of its shares by about five cents each in 2005 and add to earnings in 2006 by about eight cents per share, according to a company press release. These projections take into account the expected cost of restructuring, pinned at ten cents per share in 2005 and five cents in 2006.

Baring Asset Management will be under control of the MassMutual Financial Group, which is looking to expand its global asset management presence. MassMutual hopes that the move will increase cross-selling opportunities across other major lines of business within the company, as well as bring on board new capabilities and products, the company said. MassMutual already has a large roster of diversified investment companies that includes OppenheimerFunds, Inc., Antares Capital, Babson Capital Management, Cornerstone Real Estate Advisors, and Tremont Capital Management.

Baring Asset Management currently has $32 billion in assets under management, a total that will be added to MassMutual’s already significant $300 billion. The firm’s 600 employees will stay on board, according to all those involved, and the current leadership of Baring Asset Management will remain the same. David Brennan, who has held his posts as Chairman and CEO since July 2002, will remin in place (See Brennan to Head Baring Asset Mgmt ).

MassMutual hopes that Baring’s strength in global equity and fixed-income strategies, offered to both private investors and institutions through mutual funds and separate accounts, will add to the company’s appeal, according to a press release. The company did not release the cost of the deal.