Ameriprise (AMP) acquires EMEA asset management business from BMO – November 9, 2021


Ameriprise Financial, Inc. (CHA Free Report) has entered into the previously announced agreement with BMO Financial Group, a Canadian company, to resume its asset management activities in the EMEA region. The all-cash transaction, valued at £ 615million ($ 829million), was announced in April.

This move is expected to further strengthen Ameriprise’s wealth and asset management activities.

Ameriprise expects the acquisition to add additional value through the inclusion of certain capabilities such as ‘responsible investing, responsibility driven investing, fiduciary / outsourced management and European real estate’, that can be exploited globally. Additionally, BMO Financial’s publicly traded investment trusts will serve as positive winds for Columbia Threadneedle Investments’ closed-end fund (the global asset management arm of Ameriprise).

In addition, the acquisition will complement Columbia Threadneedle’s core business and global growth strategy. Apart from this, it will consolidate Ameriprise’s position in the European institutional market, with an expansion of investment capacities and solutions to broaden the client offer.

Jim Cracchiolo, Chairman and CEO of Ameriprise, said: “We are delighted to complete this strategic acquisition which significantly expands our reach in the EMEA region and adds significant capabilities to Columbia Threadneedle. BMO GAM EMEA’s business is doing well with positive flows, which complement the organic growth we have had. Above all, clients and institutional consultants have responded favorably. We welcome the team at Ameriprise and Columbia Threadneedle and look forward to what we can accomplish together.

As of now, Ameriprise will have more than $ 1.3 trillion in assets under management and administration. Additionally, with the addition of BMO’s EMEA asset management business, Columbia Threadneedle’s assets under management will grow to over $ 714 billion.

The strategic alliance will provide BMO Wealth Management’s North American wealth management clients with access to a range of Columbia Threadneedle investment management solutions. In the United States, it will provide the option for certain BMO Asset Management clients to relocate to Columbia Threadneedle, subject to client consent.

At the time of the transaction’s announcement, Ameriprise expected the acquisition to be accretive in 2023, with an internal rate of return of 20%.

Our opinion

Ameriprise has been engaged in a number of strategic acquisitions, which reflect its strong balance sheet and liquidity positions. It has also restructured its business from time to time through divestitures and spin-offs, with the aim of remaining profitable by focusing on its core businesses. Expansion initiatives are expected to continue to increase profitability and market share and help the company diversify its revenues.

Over the past six months, Ameriprise shares have risen 16.2%, outperforming industry growth of 2.1%.

Image source: Zacks Investment Research

Currently, Ameriprise carries a Zacks Rank # 2 (Buy). You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

Competitive landscape

Several companies in the financial sector are undertaking consolidation efforts to counter the low interest rate environment as well as the increased costs of investing in technology. In addition, mergers help diversify revenues and products.

Recently, in an effort to expand its presence, OceanFirst Financial Corp. (OCFC Free Report) has entered into an agreement with Partners Bancorp, which will merge with the former. The transaction is expected to close in the first half of 2022, subject to receipt of the required regulatory approvals, receipt of approval from Partners Bancorp shareholders and compliance with other customary closing conditions.

Last month, in an effort to further diversify deposit-taking capabilities and income mix, Raymond James (RJF Free Report) announced a cash-cum-stock agreement to acquire TriState Capital Holdings, Inc. (TSC Free Report) for around $ 1.1 billion.


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