Bank of Montreal Parent Acquires British Asset Manager for $1.2 Billion

LONDON - In a bid to expand its wealth management offerings in Europe, the Bank of Montreal’s parent company said on Tuesday that it would acquire F&C Asset Management of Britain for 708 million pounds, or about $1.2 billion.

The cash deal will expand the scale and reach of the bank’s asset management arm, BMO Global Asset Management, in Europe, creating a combined business with £162 billion in assets under management.

As part of the deal, F&C shareholders will receive 120 pence in cash for their shares for a total equivalent to £708 million pounds. The offer represents a 28 percent premium on F&C closing price on Friday.

“With an established pedigree in fixed-income investment and broad equity and property capabilities across its European platform, F&C advances BMO’s capabilities by adding scope and scale to our well-established portfolio of wealth management businesses,” said William Downe, chief executive of the BMO Financial Group.

The British asset manager’s board will unanimously recommend that shareholders vote in favor of the deal. The transaction is subject to regulatory approval and is expected to close after May 1.

F&C traces its history to 1868 with the founding of Foreign and Colonial Investment Trust, the world’s first publicly listed investment pool. The company posted net revenue of £126 million for the first six months of 2013 and has about £82 billion in assets under management.

“Looking forward, BMO represents a unique opportunity to broaden and accelerate our ambitions,” said Richard Wilson, F&C’s chief executive. “The products, geographic presence and cultures of both organizations are truly complementary and with BMO’s commitment to growth, this is clearly a very positive outcome for both our clients and employees.”

Established in 1817, BMO is Canada’s oldest bank and has operated in Britain since 1870. The bank employs about 45,000 people and provides retail banking, wealth management and investment banking services.

BMO was advised by its BMO Capital Markets unit and Barclays, while JPMorgan Chase advised F&C. The legal advisers were Freshfields Bruckhaus Deringer for Bank of Montreal and Norton Rose Fulbright for F&C.

Shares of F&C rose 5.6 percent, to more than 122 pence, in trading in London on Tuesday afternoon.