Ameriprise Financial purchases BMO's EMEA asset management unit for €711m
Columbia Threadneedle Investments is set to expand significantly in Europe as the US asset manager's parent company Ameriprise Financial has agreed to acquire the asset management business of BMO Financial Group in the Europe (including UK), Middle-East and Africa (EMEA) region. The deal is valued at £615m (€711m) in an all-cash transaction.
The operation will bring $124bn of assets under management to Columbia Threadneedle Investments, which will thus rise to $671bn and increase EMEA assets to 40% of its total AuM. The transaction is expected to close in the fourth quarter of 2021, subject to regulatory approvals. Together with BMO’s EMEA asset management business, Ameriprise will have more than $1.2trn of assets under management and administration. Furthermore, BMO and Ameriprise Financial establish a strategic relationship with BMO Wealth Management giving its North American wealth management clients opportunities to access a range of Columbia Threadneedle investment management solutions. Also, in the US, the transaction includes the opportunity for certain BMO asset management clients to move to Columbia Threadneedle, subject to client consent. Ameriprise Financial said the transaction is expected to be accretive in 2023 and to generate an internal rate of return of 20%.
The company's chairman and chief executive officer Jim Cracchiolo said, “This strategic acquisition represents an important next step as we expand our solutions capabilities, broaden our client offering and deepen our talented team. We are a disciplined acquirer and believe this transaction will build on our track record of successful acquisitions for the benefit of clients and our other stakeholders.” The acquisition will help Columbia Threadneedle Investments to bolster and expand its position on several segments in Europe including responsible investment, liability driven investing, fiduciary and outsourced management, European real estate. From BMO's standpoint, the transaction is in line with “its focus on long-term profitability as a leading North American bank and wealth manager,” said Joanna Rotenberg, group head, BMO Wealth Management. She added the firm will continue to invest in its diversified North American Wealth businesses, including its Canadian asset management business on the alternative and ESG spaces.
Ted Truscott, CEO, Columbia Threadneedle Investments, commented, “Adding BMO’s EMEA asset management business is an exceptional growth opportunity. The transaction advances our strategy and enhances our geographic and asset class diversification, enabling us to serve more clients and meet more of their needs. Critical to this opportunity is the strong alignment between our organisations. We share a client-centric culture, fundamental belief in active management, collaborative and research-based investment approach, and long-held commitment to responsible investment principles.”