New YorkBank of New York Mellon said Tuesday that it would buy the global investment servicing unit of the PNC Financial Services Group for $2.31 billion in cash, bolstering its back-end offerings for fund managers and financial advisers.
The deal is likely to help PNC pay back some of the billions in government bailout money it still holds.
It will also bolster Bank of New York’s services for big institutional clients and brokers, adding $855 billion in assets under administration and giving it a bigger presence in alternative fund assets and in Europe.
“This acquisition significantly strengthens our service offering and market share with asset managers and financial advisers, while delivering attractive returns to our shareholders,” Robert P. Kelly, Bank of New York’s chief executive, said in a statement. “We expect the transaction to accelerate our growth, deliver economies of scale and strengthen our leadership position for asset servicing and Pershing.”
One of the stronger firms to emerge from the financial crisis, Bank of New York serves mostly corporations as a custodian of assets.
Bank of New York said the acquisition price includes the purchase of about $1.57 billion of stock and the repayment of PNC intercompany debt. Bank of New York also plans to sell about $800 million in new shares to help pay for the deal.
The global investment servicing unit, based in Wilmington, Del., has about 4,500 employees. Its chief executive, Stephen M. Wynne, will remain with the business, reporting to Bank of New York’s co-heads of asset servicing, Tim Kearney and Jim Palermo.
Go to Bank of New York Press Release »
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