Franklin Templeton announced Tuesday that it will acquire Legg Mason, Inc. for $50 per share of common stock in an all-cash transaction.
Franklin Templeton will also assume approximately $2 billion of Legg Mason’s outstanding debt, and the acquisition of Legg Mason and its affiliates, which manage $806 billion in assets, will raise Franklin Templeton’s AUM to $1.5 trillion.
“This acquisition will add differentiated capabilities to our existing investment strategies with modest overlap across multiple world-class affiliates, investment teams and distribution channels, bringing notable added leadership and strength in core fixed income, active equities and alternatives,” Jenny Johnson, president and CEO of Franklin Templeton, said in a statement. “We will also expand our multi-asset solutions, a key growth area for the firm amid increasing client demand for comprehensive, outcome-oriented investment solutions.”
“The incredibly strong fit between our two organizations gives me the utmost confidence that this transaction will create meaningful long-term benefits for our clients and provide our shareholders with a compelling valuation for their investment,” Joseph Sullivan, chairman and CEO of Legg Mason, added. “By preserving the autonomy of each investment organization, the combination of Legg Mason and Franklin Templeton will quickly leverage our collective strengths, while minimizing the risk of disruption. Our clients will benefit from a shared vision, strong client-focused cultures, distinct investment capabilities and a broad distribution footprint in this powerful combination.”
Continued autonomy
Franklin Templeton said it will preserve the autonomy of Legg Mason’s affiliates, ensuring that their investment philosophies, processes and brands remain unchanged.
However, in noted that “as with any acquisition, the pending integration of Legg Mason’s parent company into Franklin Templeton’s, including the global distribution operations at the parent company level, will take time and only commence after careful and deliberate consideration.”
Johnson will continue to serve as president and CEO. There will be no changes to the senior management teams of Legg Mason’s investment affiliates. FT’s global headquarters will remain in San Mateo, CA and the combined firm will operate as Franklin Templeton.
The transaction has been unanimously approved by the boards of Franklin Resources, Inc. and Legg Mason, Inc. This transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals and approval by Legg Mason’s shareholders, and is expected to close no later than the third calendar quarter of 2020.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
