BlackRock agrees to acquire Barclays Global Investors

BlackRock, Inc. (NYSE: BLK) announced it has executed a purchase agreement to acquire Barclays Global Investors ("BGI"), including its market-leading ETF platform, iShares, from Barclays PLC ("Barclays"). The combination of BlackRock and BGI would bring together market leaders in active and index strategies to create the preeminent asset management firm operating under the name BlackRock Global Investors ("BlackRock"). The transaction would create an independent and fully integrated asset management firm with combined assets under management of over $2.7 trillion.

Barclays previously entered into an agreement to sell BGI's iShares business to another party under a "go shop" arrangement. Unless Barclays receives an offer from that party within five business days that considers to match the terms of BlackRock's agreement to acquire BGI, the Board of Directors of Barclays will execute the purchase agreement with BlackRock and recommend it to Barclays' shareholders for approval.

As one, BlackRock and BGI will have a world-class product offering across the risk spectrum to bring an even greater solutions-centered approach to retail and institutional clients. BGI's record of product innovation, risk analytics and leadership in quantitative investing, indexing, and retirement solutions will complement BlackRock's expertise in active fund management, tailored solutions, innovative culture and risk management via BlackRock Solutions.

The firm's products will include equities, fixed income, cash management and alternatives, and will offer clients diversified access to global markets through separate accounts, common trust funds, mutual funds, ETFs, hedge funds, and closed-end funds.

The ability to offer BlackRock's global mutual funds alongside iShares will create an unmatched ability to tailor portfolios for retail investors. iShares is the industry-leading ETF platform, with over $300 billion of AUM in more than 350 funds worldwide. iShares is a rapidly growing business, ranking among the top three selling mutual fund and ETF families for the last three years.

The combined firm will have unparalleled talent, analytical tools, and scale to deliver liquidity, global presence, and local market insight to clients. BlackRock will continue to be deeply committed to generating alpha as its number one priority for all actively managed products, as well to delivering highly efficient beta in passive strategies.

The industry-leading services of BlackRock Solutions will benefit from offering a broader set of risk management, advisory, and analytical capabilities to a wide variety of clients.

At the closing of this transaction, which is expected to occur in the fourth quarter, Barclays will hold a 19.9% economic interest in BlackRock. The two firms will seek to expand their relationships in investment banking and wealth management.

At closing, BlackRock will have more than 9,000 employees in 24 countries and have a meaningful presence in all major markets around the world. The addition of the BGI San Francisco office will substantially expand the firm's U.S. footprint.

"We are incredibly excited about the potential to significantly expand the scale and scope of our work with investors throughout the world. The combination of active and passive investment products will be unsurpassed, and will enhance our ability to offer comprehensive solutions and tailored portfolios to institutional and retail clients," said Laurence D. Fink, BlackRock Chairman and CEO.

"People are at the heart of successful firms, and the depth of talent in BlackRock Global Investors will be tremendous. The thought leadership and intellectual capital of the combined firm ensure we will remain at the forefront of addressing key investment issues and trends that have emerged over the past decade and are now accelerating dramatically, including globalization of capital markets, a greater focus on asset allocation, multi-asset class solutions, fiduciary management, risk management and advisory services."

"I am thrilled that Blake Grossman, CEO of BGI, will serve as a Vice Chairman of the combined firm, head of Scientific Investing, and a member of the Office of the Chairman. I look forward to welcoming him as my partner in leading the organization. I am equally excited about the deeper relationship with Barclays Capital and Barclays Wealth, and look forward to having John Varley and Bob Diamond join BlackRock's Board of Directors."

"We have long held BGI in the highest regard, and know that our cultures and values are strongly aligned. Both of our organizations place great emphasis on teamwork, excellence and integrity. The two firms have worked together for over seven years through BlackRock Solutions, where BGI's U.S. Fixed Income Group is already a client. This relationship will considerably ease integration as we go forward."

"This relationship offers the opportunity to form a closer relationship between our investment banking and wealth management business and BlackRock," said Robert E. Diamond, Jr., President of Barclays PLC. "The strength and breadth of BlackRock's combined platform will deepen our collaboration in serving clients worldwide."

Blake R. Grossman, Global CEO of BGI, commented, "BlackRock Global Investors will create significant new opportunities for the talented employees of both companies, as we help our institutional and retail clients manage their toughest investment challenges. The two firms mesh well - and I have every confidence we will smoothly integrate into one organization."