AmSouth Bancorp (ASO) has agreed to sell its $5.5 billion mutual fund family to Pioneer Investment Management Inc., the companies announced on Monday. Financial terms were not disclosed.
In explaining why it agreed to sell its 23 funds, AmSouth chairman, president and chief executive Dowd Ritter said in a statement that "it has become more difficult and expensive for small mutual fund families to compete effectively." AmSouth, a a bank holding company, has total assets of $50 bllion.
AmSouth said it expects to record a pre-tax gain of about $50 million when the deal is completed. The company said it is "evaluating alternatives to redeploy the proceeds of the transaction," which it expects to complete in the third quarter this year. These include additional debt payments and share buybacks, it said.
Excluding the gain and the redeployment of the assets, AmSouth said it expects to generate earnings of $2-$2.06 in 2005 and "does not expect a material impact to ongoing earnings per share."
AmSouth's funds would be reorganized into similar Pioneer mutual funds after the deal closes The acquisition and the reorganizations are subject to regulatory approval.
Pioneer Investments, a subsidiary of Pioneer Global Asset Management S.p.A, oversees 46 mutual funds. The companies are units of UniCredito Italiano S.p.A., which manages more than $175 billion in assets.
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