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July 01, 2009 at 04:00 AM
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 market prices as of the announcement, the entire deal was 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 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. This year, ETF assets are up 10% compared to 4% for the overall stock market.
