LSE set to buy Frank Russell, plans rights issue – Reuters


The London Stock Exchange Group is to acquire US-based asset manager and stock exchange provider Frank Russell for $2.7 billion, with the help of a $1.6 billion rights issue, writes Reuters. The LSE said in May that it was in exclusive talks with the owners about a possible acquisition for the firm, which is owned by life insurer Northwestern Mutual.

Reuters – The London Stock Exchange Group said it planned to acquire U.S.-based asset manager and stock exchange provider Frank Russell for $2.7 billion, with the help of a $1.6 billion rights issue, as it ramps up its U.S. presence.

The LSE said in May that it was in exclusive talks with the owners about a possible acquisition for the firm, which is owned by life insurer Northwestern Mutual.

The deal, which requires approval from regulators and shareholders, would create a world leader in index services, with around $9.2 trillion of benchmarked assets, and the second-biggest player in U.S. listed exchange-traded funds (ETFs).

Russell’s investment management business, which has $256 billion in assets under management, would be reviewed by the LSE to work out its positioning in the company.

Northwestern Mutual began exploring a sale of the unit in January after deciding it was not a core part of its business. Reuters reported in April that Canadian Imperial Bank of Commerce, MSCI and several private equity houses were considering bids.

“The directors believe the acquisition is a rare opportunity to acquire a high-quality U.S. business with a leading global brand providing index and investment management services,” the LSE said.

Under the plan, Len Brennan, the chief executive of Russell, will join the executive committee of LSE.

The rights issue is expected to be launched in September following shareholder approval of the acquisition.

Shares in the LSE were last trading up 4.3 percent at 1949.25 pence each, with analysts saying investors were welcoming the long-awaited deal for Russell. (Reporting by Freya Berry and Kate Holton; Editing by Paul Sandle and Pravin Char)

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