Barclays plans to sell its entire 19.6% stake in BlackRock, valued at $6.1 billion, the companies announced Monday.
As part of the sale, BlackRock will buy $1 billion of its stock back from Barclays.
“Our plan to repurchase shares demonstrates BlackRock’s commitment to effectively executing our capital management strategy and returning cash to shareholders through buybacks and dividends,” BlackRock spokesman Brian Beades said in an e-mail.
The sale was prompted by pending changes to Basel III capital requirements, which would make the shareholding “quite disadvantageous to retain,” said a banking source who asked not to be named.
The banking firm acquired the shares in 2009 as part of its $14 billion cash-and-shares sale of Barclays Global Investors to BlackRock. The $6.1 billion figure is based on the stock’s May 18 closing price of $171.91.
A private placement of the 35.2 million shares is being run by Barclays Capital, Morgan Stanley and Bank of America Merrill Lynch.
As part of the sale, Robert E. Diamond Jr., Barclays CEO, will step down from BlackRock’s board, according to an SEC filing.
BlackRock managed $3.684 trillion as of March 31.