US-based financial services firm State Street has terminated a deal, valued at $3.5bn, to acquire Brown Brothers Harriman’s (BBH) investor services business.
The deal, first announced in September last year, was targeted to expand State Street’s cross-border, alternatives, exchange-traded funds (ETFs) and other high-growth asset classes activities.
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The latest move has been taken due to delays in regulatory and other necessary approvals.
State Street said the regulators have proposed changes that are complex and pose additional operational risk to the company.
The changes would offer lower benefits than the originally expected ones, among others, added the firm.
These factors have led State Street to believe that the deal would not be beneficial for its clients, shareholders or employees in a tumultuous financial services mergers and acquisitions (M&A) market.
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By GlobalDataState Street chairman and CEO Ron O’Hanley said: “From the beginning of our discussions with BBH in 2021, I have been impressed by the quality of the BBH Investor Services business and its people. The decision not to proceed with this transaction was not taken lightly and is in no way a reflection of the quality of the BBH franchise.
“Since we announced the proposed acquisition, we maintained our focus on achieving a transaction that would meet our strategic and financial objectives.
“Our overall strategy is strong and differentiated, and we remain confident in the organic growth trajectory of our business.”
