Consolidation was the key factor in money management mergers and acquisitions for 2004, as increased regulations, an emphasis on distribution capabilities and the need to further diversify product offerings put pressure on firms' bottom lines.
The October merger of F&C Group Holdings Ltd. and ISIS Asset Management PLC, both of London, to create F&C Asset Management PLC, for a whopping $1.4 billion, was the largest transaction of the year, according to Cambridge International Partners Inc., New York.
"The F&C and ISIS deal is an illustration of two already successful groups of similar size coming together to obtain to consolidation economics as well as a number of strategic benefits," said Paul Holt, president of Cambridge International Partners Inc.
F&C was owned by Eureko BV, Utrecht, Netherlands; ISIS, by Friends Provident PLC, Edinburgh.
Eureko had achieved a better valuation for F&C through the merger than from an initial public offering, which had been contemplated, Mr. Holt added. The merger of the asset management subsidiaries creates the fourth largest asset manager in the United Kingdom.
Another deal driven by consolidation was New York-based MetLife's sale of State Street Research Management & Co, Boston, to BlackRock Inc., New York.