Last Updated: 14 September 2023
According to press reports at the weekend, BlackRock Inc. is closing in on a deal to acquire Barclays Global Investors (“BGI”), the parent company of iShares, in a transaction worth up to US$13 billion.
Barclays is expected to reach a decision early this week on who will purchase its asset management division, the Financial Times reported.
The transaction is likely to be a complex one, with Barclays expected to acquire a stake of 20% in BlackRock, BlackRock likely to rely on financing from Middle Eastern sovereign wealth funds, and Barclays’ president, Bob Diamond, rumoured to be joining the board of the US group. Larry Fink, BlackRock’s founder and chief executive, met the Kuwait and Qatar Investment Authorities last week to seek funding, according to the Financial Times.
The deal, if confirmed, would set a record for the acquisition of an asset management company, dwarfing the US$ 8.5 billion paid by BlackRock for Merrill Lynch’s fund arm in 2006. It would also trigger a payout of US$585 million for the 200 employees of BGI with stakes in the company, with Diamond set to receive around US$ 30 million.
Although weekend press reports suggested that a new deal is close to being reached, Barclays has another ten days until the June 18 deadline for seeking further bids for iShares and other related businesses. This was set as part of the US$ 4.2 billion May agreement to sell iShares to CVC Capital Partners. CVC will receive a US$ 175 million break fee if Barclays concludes a transaction with a third party, as now seems likely.
A BlackRock acquisition of BGI would mean intensifying competition in the fixed income ETF market, according to some observers. Last week, Pimco, BlackRock’s biggest rival initiated its ETF range with a 1-3 year US Treasury bond tracker, undercutting the equivalent iShares fund with a nine basis point annual fee.
Luke Handt is a seasoned cryptocurrency investor and advisor with over 7 years of experience in the blockchain and digital asset space. His passion for crypto began while studying computer science and economics at Stanford University in the early 2010s.
Since 2016, Luke has been an active cryptocurrency trader, strategically investing in major coins as well as up-and-coming altcoins. He is knowledgeable about advanced crypto trading strategies, market analysis, and the nuances of blockchain protocols.
In addition to managing his own crypto portfolio, Luke shares his expertise with others as a crypto writer and analyst for leading finance publications. He enjoys educating retail traders about digital assets and is a sought-after voice at fintech conferences worldwide.
When he's not glued to price charts or researching promising new projects, Luke enjoys surfing, travel, and fine wine. He currently resides in Newport Beach, California where he continues to follow crypto markets closely and connect with other industry leaders.