Franklin Resources agreed to acquire asset manager Legg Mason for almost US$4.5 billion in a deal that would create an active-management investing giant.[NEW YORK] Franklin Resources agreed to acquire asset manager Legg Mason for almost US$4.5 billion in a deal that would create an active-management investing giant.
Franklin will pay all cash for Legg Mason, the companies said in a statement Tuesday. The transaction values Legg Mason at US$50 per share, a 23 per cent premium to the Baltimore-based company's share price Friday. The transaction is another case of consolidation in the industry, as firms grapple with falling fees and the rising challenge from managers of index-tracking funds. In November, Charles Schwab agreed to buy TD Ameritrade Holding for about US$26 billion; Janus Henderson Group and Standard Life Aberdeen were both formed in mergers in 2017.
Tuesday's announcement comes less than a year after activist investor Trian Fund Management took a 4.5 per cent stake in Legg Mason, enough to secure its founder Nelson Peltz a position on the board. Just days later, the fund manager said it would cut about 12 per cent of its staff and reduce its executive committee to four from eight members. Mr Peltz said at the time his three top priorities were"significantly reducing costs, driving revenue growth organically and through acquisition, and increasing profitability."
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