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Money managers

First State Investments to be acquired by Japan’s Mitsubishi UFJ

Mitsubishi UFJ Trust and Banking is acquiring First State Investments in an A$4.1 billion ($2.9 billion) deal.

First State’s owner, Commonwealth Bank of Australia, announced it would sell its global money management business — known as Colonial First State Global Asset Management in Australia, late Tuesday. The firm has A$213 billion in assets under management.

The deal, set to close midyear 2019, follows CBA’s decision to break out its wealth management and mortgage broking business, which was to include the money management unit. Following that announcement in June, Mitsubishi UFJ approached CBA in relation to First State and CBA’s board decided to explore the potential sale, said the deal announcement.

“CFSGAM is a high-quality business that has achieved strong growth under CBA’s ownership for over 18 years,” said Commonwealth Bank CEO Matt Comyn in the announcement. “MUTB is one of the largest asset managers in Japan, with a long history and deep capabilities. We believe that CFSGAM’s clients and employees will benefit from MUTB’s supportive long-term ownership.”

The deal is subject to a number of regulatory approvals from regulators in Australia, Japan, Hong Kong, Singapore, the U.K. and the U.S.

Mikio Ikegaya, Mitsubishi UFJ president and CEO, said in the same announcement: “We are delighted that CFSGAM, a highly distinguished, diverse and growing asset manager, is joining our group. We expect CFSGAM will continue to deliver leading investment solutions to its existing global client base. We also believe CFSGAM’s highly seasoned investment teams and competitive product lineups will enable us to deliver new investment opportunities to our clients. We look forward to welcoming the full CFSGAM team to our group.”

MUTB is a wholly owned subsidiary of Japanese institution Mitsubishi UFJ Financial Group, which has 72.5 trillion ($647.8 billion) in assets under management.

Last month, a news release said Mark Lazberger, CEO of Colonial First State Global Asset Management for the past decade, will be leaving the firm in December.

A statement provided by a spokeswoman for First State Investments said Mark Steinberg, chief operating officer, had been appointed permanent CEO following the announcement of the acquisition. “MUTB does not intend to replace any members of the FSI management team and intends to allow FSI to operate as a largely ‘stand-alone’ operation, supporting the current levels of independence and decision-making,” said the statement.

Separately, Kazuto Yoshida, senior manager of public relations section, Mitsubish UFJ Trust and Banking Corp., said in an email that almost all of MUTB’s assets under management is institutional, and that “we will respect the current teams.”