Merrill Lynch & Company Inc. agreed to acquire Advest Group Inc., an investment firm, from AXA Financial Inc. for $400 million in cash.
AXA Financial, New York, a unit of AXA S.A., Paris, ended up with Advest in 2004, after acquiring MONY Group Inc., New York, for $1.5 billion.
MONY paid $278 million to acquire Advest, Hartford, in 2001. When MONY acquired Advest, Advest was an independent investment firm.
AXA Financial has not directly discussed how much of the $1.5 billion that it paid for MONY in 2004 covered the cost of acquiring Advest. But AXA Financial now is saying that it will record a $96 million post-tax loss in connection with the sale of Advest to Merrill Lynch.
The Merrill Lynch deal will reduce AXA Financial’s goodwill by $190 million, AXA Financial says in a report filed with the U.S. Securities and Exchange Commission.
The goodwill loss amounts to 31% of the total goodwill associated with the MONY deal, AXA Financial says.
Goodwill represents the difference between the price one company has paid for another company and the book value of the acquired company’s assets.
Merrill Lynch, New York, will be getting Advest’s Lebenthal retail municipal bond business as well as Advest’s wealth advisory service, its Boston Advisors asset-management unit and its capital markets unit, which helps companies and government agencies raise money by issuing stock and bonds.
The 3 Advest units have 1,560 employees, according to AXA Financial.
Merrill Lynch hopes to complete the deal by Dec. 31.
Robert McCann, president of the global private client group at Merrill Lynch, says his company is buying Advest to get access to Advest’s wealthy retail clients and its team of retail advisors.
Christopher Condron, president of AXA Financial, says his company is selling Advest because Advest is a better fit for Merrill Lynch than for AXA Financial.
The Advest transaction “allows us to reinvest in our strong core businesses of life insurance and annuities,” Condron says in a statement about the deal.