Price is buying rest of Price-Fleming unit

British partner getting $780 million in all-cash deal

April 12, 2000|By Bill Atkinson | Bill Atkinson,SUN STAFF

In its biggest acquisition to date, T. Rowe Price Associates Inc. said yesterday that it has reached an agreement to buy its British partner's 50 percent stake in their joint money-management venture for $780 million in cash.

The deal with Robert Fleming Holdings Ltd. would give Price total ownership of Rowe Price-Fleming International Inc., an international investment firm that manages $43 billion in assets.

It also would enable the Baltimore-based mutual fund company to offer international investment services to non-U.S. residents, something it was restricted from doing under its partnership arrangement with Robert Fleming Holdings.

"We think this presents a long-term growth opportunity and one we expect to take advantage of," said Steven Norwitz, spokesman for Price, which manages $180 billion for institutions and individual investors.

"T. Rowe Price truly becomes a global company," Norwitz said."We will be more aggressive in offering international investment services in overseas markets."

Price said the deal, which is subject to regulatory approvals, is expected to close in three or four months after Chase Manhattan Corp.'s purchase of Robert Fleming Holdings.

Since its founding in 1979, Rowe Price-Fleming has expanded with offices in London, Hong Kong, Tokyo, Singapore, Buenos Aires, Paris and Baltimore, Norwitz said. Rowe Price-Fleming employs 19 investment managers and research analysts, and he expects them to remain with the firm. Price will eventually change Rowe Price-Fleming's name, but Norwitz did not have a specific date.

The deal was sparked by merger negotiations between Chase Manhattan and Robert Fleming Holdings that culminated yesterday with Chase's agreement buy the British company for $7.7 billion in cash and stock.

Chase, the United States' third-largest bank, is seeking to boost its fund-management and investment-banking businesses.

Fleming, one of the last British-owned merchant banks, manages more than $140 billion for clients and has brokerage businesses in 40 countries. Its asset-management strengths are in Europe and Asia, while Chase's are in the United States.

"Chase needs an asset-management company in Europe to be a global firm in the same mold as Citigroup, and Fleming is a step in that direction," said Thomas Goggins, a fund manager at John Hancock Funds.

Chase said the offer values Fleming at 27.44 pounds, or $43.48, per share. It is composed of $4.08 billion in cash and $3.62 billion in Chase stock.

Bloomberg News contributed to this article.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.