PNC Financial has agreed to sell its 22.4% holding in asset manager BlackRock, ending its 25-year-old relationship with the asset manager.
Under the agreement, PNC will sell the 34.8 million shares it owns in Blackrock, accounting for a $17bn interest.
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Blackrock will buy back $1.1bn of its shares from PNC.
However, PNC will retain 500,000 of Blackrock shares for a donation to the PNC Foundation by the end of Q2 2020.
The deal already secured the nod of the PNC board.
PNC CEO William Demchak said: “BlackRock’s long track record of strong performance and growth has created significant value since PNC acquired our stake in the company.
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By GlobalData“As good stewards of shareholder capital, we have consistently reviewed options to unlock the value of our investment. We feel the time is now right to do just that, realising a substantial return on our investment.”
PNC bought into the $6.5trn asset manager in 1995. At present, the firm is the largest stakeholder in BlackRock.
According to Demchak, the deal would make PNC “well-positioned to take advantage of potential investment opportunities” in the disrupted markets.
He further stated that the transaction would do away with regulatory obligations of owning a large position in another diversified financial services company.
