Theodore Roosevelt said that “Leaders lead, while bosses merely drive”. Blackrock’s doing both: leading where others have been hesitant to go and now in the ETF driver’s seat as a result. Blackrock’s $13.5 billion acquisition of Barclays’ asset management business makes it the world’s largest asset manager; challenging PIMCO on the bond front, and Vanguard and to a lesser extent, Invesco-Powershares on the ETF front. Barclays now reverts to a bank (now, having safeguarded its tier 1 credit). BlackRock, which has been acquiring companies quietly but substantively over the past two years, is set to give everyone a run for their money.
Here’s an excerpt from the press release:
NEW YORK, June 11, 2009 – BlackRock, Inc. (NYSE: BLK) announced it has executed a purchase agreement to acquire Barclays Global Investors (“BGI”), including its market-leading ETF platform, iShares, from Barclays PLC (“Barclays”). The combination of BlackRock and BGI would bring together market leaders in active and index strategies to create the preeminent asset management firm operating under the name BlackRock Global Investors (“BlackRock”). The transaction would create an independent and fully integrated asset management firm with combined assets under management of over $2.7 trillion.
Under the terms of the transaction, BlackRock would acquire BGI in exchange for 37.8 million shares of common and common equivalents in BlackRock and $6.6 billion of cash. The shares will represent a 4.9% voting interest and an aggregate 19.9% economic interest in the combined firm, which will be renamed BlackRock Global Investors.