Mellon Financial Corp. will not handle the operational and administrative functions of the former ISIS Asset Management. Contract talks between Mellon and F&C Asset Management, created in the merger of F&C Management and ISIS in October 2004, have ended, according to Jack Klinck, a Mellon Financial vice chairman and member of the firm's executive management group. Mellon's existing outsourcing contract with the former F&C Management remains in effect. Mr. Klinck said Mellon agreed to end the talks earlier today, noting the association between Mellon and F&C "continues to be a strong relationship." He said price and scope of services were the main issues.
Jason Hollands, an F&C spokesman, confirmed the two firms have ended contract negotiations for the outsourcing project. "We will enhance our overall capabilities and service by building a data warehouse to consolidate data from our various outsource providers," Alain Grisay, F&C's deputy CEO, said in a news release today. The decision to end the project will lower estimated operational integration costs to £50 million ($88.1 million) from £60 million, and "there will be no impact on reported earnings," Mr. Grisay said in the statement.
Mr. Klinck also said there will be "no immediate impact" on Mellon's financial statements as a result of the decision.