Invesco will buy OppenheimerFunds from insurer MassMutual for $5.7 billion.
The arrangement will increase Invesco’s value to $1.2 trillion and place it in the upper echelons of asset management firms by size.
Aside from the money, MassMutual will receive a 15.5% stake in Invesco, coming along for the ride in the firm’s ascension to 13th-largest globally (sixth-largest in US retail). It has also nominated former OppenheimerFunds CEO William F. Glavin Jr., as its representative on Invesco’s board.
One of the key attractions for Invesco is Oppenheimer’s global and emerging markets equity skills. Another is its US third-party distribution system.
Martin L. Flanagan, Invesco’s president and CEO, said the “compelling, highly strategic, and accretive” deal would enhance the organization’s US and global market leadership, meet client goals, and, of course, deliver strong financial results.
“OppenheimerFunds’ culture and commitment to high-conviction investing complement our own, and the combination will create significant opportunities for the talented professionals of both companies,” Flanagan said.
Invesco expects the move to increase earnings per share by about 18% in the first nine months of 2019, and around 27% in 2020.
MassMutual Chairman Roger W. Crandall said the deal will allow the insurer to “continue to benefit from a strong, diversified global asset management business,” and stay focused on its purpose “to help people secure their future and protect the ones they love.”