Famous American Investment management firm, BlackRock Inc., will buy the investment unit of Barclays PLC, another major European financial firm, for $13.5 billion. This merger would become one of the largest investment firms in the world with assets worth $2.7 trillion.
The newly formed company named BlackRock Global Investors (BRGI), will have a market value of more than $34 billion. In a statement issued by BlackRock Inc., the company said that it would pay $6.6 billion in cash and rest will be paid in stock for Barclays Global Investors. In the newly formed company, Barclays will have a 19.9% stake. The combined company will raise funds worth $2.8 billion through equity sales and borrow $2 billion from Barclays and other banks. Laurence Fink, Chairman and CEO, BlackRock Inc. said that this would widen the range of products offered by the companies.
John Varley, CEO, Barclays and Robert Diamond, President, Barclays’ will join the board of directors of BRGI. Blake Grossman, CEO, Barclays Investment Unit, will be vice chairman of BRGI.
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