ING Sells Baring Unit To MassMutual

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ING Group, Amsterdam, has agreed to sell its Baring Asset Management unit in 2 parts to Massachusetts Mutual Life Insurance Company and Northern Trust Corp.

MassMutual, Springfield, Mass., will buy Barings investment management division, while Northern Trust, Chicago, will acquire the companys financial services group.

Under the terms of the agreement, MassMutual will have the exclusive right to use the Baring Asset Management name, says Robert J. OConnell, chairman, president and CEO of MassMutual.

Financial terms of the deal were not disclosed, although OConnell said in an interview that MassMutual would pay “well above $100 million” for Baring Asset Management Limited U.K. along with related subsidiaries.

OConnell says the main goal of the acquisition is to give MassMutual a quick route to the global asset management business. The acquired firm has more than 600 employees, including 100 investment professionals in London, Hong Kong, Tokyo and Boston, and other offices throughout the world.

OConnell says the acquisition will add around $32 billion to his companys assets under management, which currently stand at more than $300 billion.

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

Having exclusive rights to the widely recognized Baring name was an important part of the deal, according to OConnell.

“We insisted we get [the name], and we get the right to use it in other businesses, as well,” he says.

His companys international strategy is similar to the one it has used to build a domestic portfoliousing acquisitions that complement its main businesses, OConnell says.

“Were certainly interested in Asia, particularly Singapore, Thailand, Malaysia, Korea and possibly Australia,” he explains. “But we would only go in if we could buy a good, solid company thats already there.”

BAMs 600 employees will continue in their jobs after the acquisition. In addition, David Brennan, chairman and CEO of Baring Asset Management, will retain his position along with other top executives, OConnell says.

The acquisition will be the third international addition MassMutual has made in the past year. In March, it announced an agreement to buy Fuh-Hwa Investment Trust Co. Ltd., a mutual fund company in Taiwan, and in September it bought Capital Debt Management Ltd., London, now Babson Capital Europe Ltd., which invests in the European leveraged loan market.

MassMutual also plans to expand in Europe and move into Latin America, according to OConnell.

Although the acquisition will provide some opportunities for MassMutual to sell its products to Baring clients, and vice versa, “it was not acquired for cross-selling opportunities,” he says, “but because its a great company.”

OConnell expects to complete the deal in the 1st quarter of 2005.

Northern Trust, a multibank holding company, will pay around $480 million for the financial services end of Barings business, which includes fund administration and trust services. MassMutual had no interest in that end of the business, OConnell says.

ING purchased Baring Asset Management 9 years ago for only 1 after the firm went bankrupt following some disastrous investments in the Hong Kong market.

In an announcement, ING said it was selling BAM as part of its strategy “to actively manage its portfolio and focus on core businesses.”

Earlier this month, ING agreed to sell its Life Insurance Company of Georgia unit to Jackson National Life Insurance Company, Lansing Mich., a subsidiary of Prudential PLC, London.


Reproduced from National Underwriter Edition, November 24, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.