American asset manager Invesco has agreed to acquire MassMutual’s asset management affiliate OppenheimerFunds for about $5.7 billion.
Invesco will pay about $5.7 billion, including $4 billion in preferred shares, and 81.9 million of common stock, to MassMutual. The preferred shares has a 21-year non-call period and will pay a fixed rate of 5.9%.
The 81.9 million shares include about 6.6 million shares to be issued for conversion of unvested restricted stock awards for OppenheimerFunds employee shareholders.
Following this, MassMutual is expected to own about 15.5% stake in the common equity of Invesco and become its largest shareholder.
The acquisition, Invesco’s third this year, will bring its total assets under management to more than $1.2 trillion, making it the 13th largest global investment manager.
As of end-June, Invesco had a total AUM of $980.9 billion, in which about $101.4 billion was sourced from Asia.
The company’s spokesperson declined to comment on whether or not the acquisition will affect its products offerings in Asia.
A spokesperson told Citywire Asia that no activities or changes will be made as result of this combination until after closing of the deal.
The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals.
Without giving out details, Invesco said the companies will explore future strategic collaboration opportunities.
Martin L. Flanagan, president and CEO at Invesco, said the acquisition will enhance Invesco’s leadership in the US and global markets as well as broaden its relevance among top clients, among others.