Northern Trust Corporation and ING Group N.V. (Netherlands) announced today that they have reached an agreement for Northern Trust to acquire Baring Asset Management's Financial Services Group (FSG) for approximately 260 million pounds Sterling (approximately $480 million at current exchange rates), subject to adjustments to reflect changes in net assets, revenues, and other stipulations.
FSG is the institutional fund administration, custody, and trust services arm of Baring Asset Management, a unit of ING Group.
The agreement is subject to applicable regulatory approvals and other customary closing conditions. Upon completion of the acquisition, Northern Trust will acquire a fund services group with approximately $63 billion in funds under administration, $28 billion in custody and $32 billion in trust assets as of September 30, 2004.
This acquisition will complement Northern Trust's existing fund services capabilities in London, Dublin and Luxembourg and its growing back and middle office outsourcing activities for fund managers.
"The scope of FSG's business will significantly enhance and expand our global fund administration capabilities, as well as our growing hedge fund, private equity, and property administration capabilities," said William A. Osborn, Chairman and Chief Executive Officer of Northern Trust Corporation. "This acquisition exemplifies Northern Trust's continued philosophy of capability driven expansion, and it fits strategically with our commitment to the fast-growing global fund manager segment."
FSG currently employs approximately 770 people, and its business is currently managed from offices in London, Dublin, Guernsey, Jersey and the Isle of Man. Northern Trust intends to fully integrate FSG into its international asset servicing business, headquartered in London, while maintaining FSG's offshore business centers.
Northern Trust estimates the acquisition to be modestly dilutive to earnings per share by approximately $0.05 in 2005 and modestly accretive to earnings per share by approximately $0.08 in 2006. These estimates include restructuring costs associated with the acquisition of approximately $0.10 per share in 2005 and $0.05 per share in 2006.