US fundhouse Franklin Templeton is acquiring rival firm Legg Mason to create a funds giant with £1.1trn of assets under management.
Legg Mason is listed on the New York Stock Exchange and operates in the UK via a series of subsidiaries, including Martin Currie.
By acquiring the business, Franklin Templeton is acquiring the various affiliates.
Franklin Templeton will pay $50 (£38) per share, equating to £4.1bn, and also take over $2bn (£1.5bn) of Legg Mason’s debt.
In a statement announcing the news, Franklin Templeton stated the various affiliate businesses that are part of Legg Mason will continue to operate autonomously, and with the same management teams and brand names.
The Legg Mason name will disappear though, with the combined company using the Franklin Templeton name.
One subsidiary business of Legg Mason, alternative fund house EnTrust Global, is not being acquired by Franklin Templeton as part of the takeover, instead it is being acquired by its management team.
The chief executive of Franklin Templeton, Jenny Johnson, will be chief executive of the combined company.
Ms Johnson said: “This transaction gives us significant scale, addresses strategic gaps and brings greater balance to our business, while positioning us for accelerated growth in the future.
"We have incredible respect and admiration for the success Legg Mason and its investment affiliates have achieved and we have structured the transaction to ensure that its affiliates have the right mix of independence and support to continue building on their strong track records.
"Legg Mason’s investment affiliates will be able to leverage Franklin Templeton’s global infrastructure and ongoing investment in technology and innovation, while clients can take comfort in the combined firm’s financial strength and aligned interests.”
Franklin Templeton has also been active in the UK platform market recently as one of the backers of Embark Group, which acquired the Zurich platform and the advised platform book of business of Alliance Trust Savings.
david.thorpe@ft.com
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