NU Online News Service, June 5, 4:15 p.m. – Liberty Financial Companies, Inc., Wellesley Hills, Mass., has agreed to sell its asset management operations to FleetBoston Financial Corp., Boston, for $900 million in cash.
FleetBoston will also assume responsibility for $110 million in revolving debt that Liberty Financial accumulated to pay sales commissions, Liberty Financial says.
FleetBoston will acquire all of Liberty Financial’s asset management operations, including Colonial Management Associates, Crabbe Huson Group, Liberty Asset Management Company, Newport Pacific Management, Progress Investment Management Company, Stein Roe & Farnham and Liberty Wanger Asset Management. The units manage a total of $51 billion in assets.
Liberty Financial announced in 2000 that it was looking for a buyer. It agreed May 3 to sell two major units, Keyport Life Insurance Company, Boston, and Independent Financial Marketing Group, Purchase, N.Y., to Sun Life Financial Services of Canada Inc., Toronto, for $1.7 billion.
The FleetBoston transaction “is the last major step to complete the sale of Liberty Financial Companies,” says Gary Countryman, president of Liberty Financial.”
The transaction with FleetBoston is subject to approvals of regulatory authorities and shareholders.
Liberty Mutual Insurance Company owns 70% of Liberty Financial’s stock. The insurance company has agreed in connection with the FleetBoston deal to make Liberty Financial a wholly owned subsidiary, Liberty Financial says.
Liberty Mutual and its subsidiaries have about $450 million in public debt, according to Standard & Poor’s, New York.
“Standard & Poor’s believes LFC’s management willingness and ability to honor its obligations is strong,” the rating agency says.
But S&P wants to hear more from the company’s managers about how it plans to honor its obligations to its lenders, S&P says.