State Street To Acquire Investor Services Business Of Brown Brothers Harriman For $3.5 Bln Cash

Financial services and bank holding company State Street Corporation (STT) on Tuesday announced its decision to buy the Investor Services business of Brown Brothers Harriman & Co. (BBH) for $3.5 billion, to be paid in cash.

The investment management services provider, Brown Brothers Harriman is offloading its Investor Services business, including custody, accounting, fund administration, global markets and technology services.

As June 30, 2021, BBH had Assets Under Custody (AUC) of $5.4 trillion, which is getting added to $31.9 trillion AUC of State Street, upon completion of the deal, expected by the year-end 2021.

The acquisition is expected to be accretive to earnings per share in year 1 and the company is now targeting an increased pre-tax margin of 31%.

Following the deal, BBH will still own and operate its separate Private Banking and Investment Management businesses.

"We are enhancing our leadership position across a range of services, augmenting our position in a number of key markets, growing relationships with many of the leading global asset managers and owners, and increasing our capabilities and scale," said Ron O'Hanley, Chairman and Chief Executive Officer of State Street Corporation.

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