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May 13, 2021

Schroders drops plans to buy M&G over cost concerns

By Amala Johney

Schroders has reportedly abandoned a plan to acquire investment manager M&G after evaluating the deal for months.

Earlier this year, the British asset manager hired a partner to analyse a potential demerger of M&G by breaking up its asset management operations from its pension and insurance division.

The deal, which would have formed a UK fund powerhouse managing over $1trn of assets, has been ditched by Schroders over cost concerns, Bloomberg reported citing undisclosed sources.

Schroders did not initiate any formal discussions with M&G over a potential deal, the sources said.

The M&G is said to have a market value of £5.7bn currently, after its shares more than doubled from their low in last March.

The firm offers equities, bonds, and property funds, in addition to providing infrastructure and alternative investment.

It also provides a range of pension, retirement, and insurance products in the UK and Europe.

Last year, the firm set up a wealth management division with £28bn in assets under management and administration and acquired Ascentric digital investment platform from Royal London.

The deal, if pursued, would have been a major move forward for Schroders in its dealmaking plans, in addition to accelerating its growth plans in Asia leveraging M&G’s network in the region.

Representatives for Schroders and M&G did not comment on the report.

The company has been acquiring smaller firms, both under current CEO Peter Harrison and former CEO Michael Dobson.

Its largest acquisition till date is the $644m takeover of wealth manager Cazenove Capital in 2013.

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