Canadian Imperial Bank of Commerce (CM) is expanding its
international asset-management business with the US$848 million
purchase of a 41% stake in U.S. asset-manager American Century
Investments.
The big Canadian chartered bank expects the acquisition to
immediately bolster earnings and add about 15 Canadian cents a
share to its fiscal 2012 cash earnings.
CIBC will purchase the minority stake in Kansas City-based
American Century, which has assets under management of US$112
billion, from JP Morgan Chase & Co.
On closing, expected in the next three months, CIBC will hold
10.1% of American Century's voting rights and be entitled to two
representatives on its 10-member board. The bank said American
Century's major shareholder is the Stowers Institute for Medical
Research.
"This investment will build on our strong franchise in Canada
and provide CIBC an additional platform for growth in asset
management internationally," CIBC President and Chief Executive,
Gerry McCaughey, said in a statement. "It is aligned with our risk
appetite and provides attractive fee-based income, geographic
diversification and revenue synergies within our asset management
business," he added.
-By Judy McKinnon, Dow Jones Newswires; 416-306-2100;
judy.mckinnon@dowjones.com