BlackRock Inc. announced June 11 that it will acquire Barclays Global Investors for $6.6 billion in cash and 37.8 million shares of BlackRock common stock and equivalents, creating by far the largest asset management firm in the world–BlackRock Global Investors–with $2.7 trillion in assets under management–in a deal that the companies said is expected to close in the fourth quarter of this year. At current market prices, the entire deal is valued at $13.5 billion.
The combination of BlackRock’s mutual funds with Barclays Global’s iShares ETF platform will give the new firm preeminence in both active and passive investing strategies for retail investors and advisors, serving clients in more than 60 countries through 9,000 employees in 24 countries. After the acquisition closes, BGI parent Barclays PLC will retain a 19.9% stake in BlackRock Global Investors.
In the most recent ETF Snapshot released June 10 by Barclays ETF competitor State Street Global, Barclays had 49.5% of the total U.S. ETF market, with $290 billion in 180 ETFs; as of May 31, there were 728 ETFs in the U.S. managed by 24 firms, with total assets of $587 billion. This year, ETF assets are up 10% compared to 4% for the overall U.S. stock market, and were up 10.6%, or 10.6%, in the month of May alone.