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MassMutual To Buy Offshoot Of Historic Merchant Bank

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ING Groep N.V., Amsterdam, has agreed to sell its Baring Asset Management unit to 2 U.S. companies.[@@]

Massachusetts Mutual Life Insurance Company, Springfield, Mass., will buy Baring’s investment management division.

Northern Trust Corp., Chicago, will acquire the company’s financial services group.

MassMutual will get Baring Asset Management Limited U.K. along with related subsidiaries. Terms were not disclosed, but MassMutual Chairman Robert J. O’ Connell says MassMutual will pay “well above $100 million.”

O’Connell says the main goal of the acquisition is to give MassMutual a quick route to the global asset management business. The acquired firm has investment teams in London, Hong Kong, Tokyo and Boston.

The Baring asset management unit, founded in 1958, is an offshoot of Baring Brothers & Company, London, a merchant bank founded in 1762 that was known for its legendary entrepreneurial elan. The asset management unit now manages about $32 billion in assets.

MassMutual has about $300 billion in assets under management, O’Connell says.

Baring “is a strong strategic fit as we grow our investment operations internationally,” he says.

Of the 2 acquiring firms, only MassMutual will have the rights to the widely recognized Baring Asset Management name, O’Connell says.

“We insisted we get it, and we get the right to use it in other business as well,” O’Connell says.

O’Connell says MassMutual’s international strategy is similar to the one it has used to build a domestic portfolio–using acquisitions that complement its main businesses.

“We’re certainly interested in Asia, particularly Singapore, Thailand, Malaysia, Korea and possibly Australia,” he says. “But we would only go in if we could buy a good solid company that’s already there.”

BAM has about 600 employees globally. They will continue to work for the company after the acquisition. David Brennan, chairman of Baring Asset Management, and other top executives will retain their positions, O’Connell says.

O’Connell says he expects to complete the deal by March 31, 2005.

Northern Trust, a multibank holding company, said it will pay about $480 million for Baring’s financial services group, which sells fund administration and trust services.


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