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Invesco To Acquire Morgan Stanley’s Van Kampen Investments In $1.5b Deal

The deal provides Morgan Stanley a 9.4% equity interest in Invesco

Invesco has entered into a definitive agreement to acquire Morgan Stanley’s retail asset management business, including Van Kampen Investments.

Under this transaction, Invesco acquires a diversified business with $119 billion in assets under management across equity, fixed income, alternatives and unit investment trusts. The organisation will expand by approximately 650 investment, distribution and operations support professionals globally.

The transaction is valued at $1.5 billion, comprising $500m in cash and 44.1 million shares representing $1 billion in Invesco equity that provides Morgan Stanley a 9.4% equity interest in Invesco.

According to the Invesco, combination will benefit clients and fund shareholders of both organisations and allows it to offer a range of investment capabilities and vehicles to customers around the world; enhancing ability to serve US customers; deepens company’s relationships with customers and strengthens overall distribution capabilities; and strengthens company’s position in the Japanese investment management market.

Reportedly, at closing, Invesco will have approximately 700 investment professionals, with a meaningful presence in all major markets around the world. The transaction is expected to close in mid-2010.

Martin Flanagan, president and CEO of Invesco, said: “We are excited to expand the depth and breadth of our investment strategies, which will enable us to offer our clients a truly comprehensive range of investment capabilities through an expanded set of investment vehicles. This combination of talented teams from both organisations will enhance Invesco’s ability to deliver meaningful solutions to our retail and institutional clients around the world, and better position Invesco for long-term success.”

Loren Starr, chief financial officer of Invesco, said: “This complementary combination fully meets Invesco’s previously stated acquisition criteria, and we believe strongly benefits our clients and shareholders. We expect that this transaction will be approximately 11% accretive in the first 12 months after close and have an IRR of approximately 30%.”