Merrill Lynch & Company Inc. has agreed to acquire Advest Group Inc., an investment firm, from AXA Financial for $400 million in cash.[@@]
MONY Group Inc., New York, paid $278 million to acquire Advest, Hartford, in 2001.
AXA Financial, New York, a unit of AXA S.A., Paris, ended up with Advest in 2004, after acquiring MONY for $1.5 billion.
AXA Financial will record a loss of $96 million after taxes in connection with the Merrill Lynch deal, and 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.