Australia-based asset manager Perpetual has entered into an agreement to acquire its smaller rival Pendal Group in a deal valued at A$2.51bn ($1.7bn).
Pendal, which was listed on the Australian Securities Exchange since 2007, is a multi-boutique firm that provides a range of investment strategies.
It has presence in Sydney, Melbourne, London, Prague, Singapore, New York, Boston and Berwyn in the US.
As part of the new cash-and-stock deal, shareholders of Pendal are expected to receive A$6.54 per share, with a single Perpetual share for every 7.5 of Pendal, in addition to a cash consideration of A$1.976 for each Pendal share.
The new deal represents an improvement of A$0.306 per share from an initial bid made in April this year, which was rejected by the Pendal shareholders.
Subject to fulfilment of various conditions, including Pendal shareholder, regulatory and other approvals, the deal is anticipated to be completed by late this year or early next year.
Once closed, the consolidated entity aims to become a new global leader in multi-boutique asset management with more than A$201bn ($138bn) assets under management (AUM), serving across 16 locations worldwide.
Perpetual chairman Tony D’Aloisio is set to become the chairman of the merged group, while Perpetual CEO and managing director Rob Adams is expected to lead the new company.
At least three directors of Pendal will be invited to become board members at Perpetual.
In addition, Perpetual and Pendal shareholders are expected to own nearly 53% and 47% shares of the merged entity, respectively.
D’Aloisio said: “Our Board and management see this as a defining acquisition that brings together two of Australia’s oldest and most respected active asset management brands to create a diversified global asset management business of substantial scale.
“We believe the combination represents a strategically and financially compelling opportunity for both sets of shareholders, with our respective strategic ambitions realised significantly sooner than would otherwise occur.”