State Street to Buy Securities Business of Italian Bank
BOSTON (AP) — The State Street Corporation, the financial services provider, said Tuesday that it would buy the securities services business of Italian banking group Intesa Sanpaolo for about $1.87 billion in cash.
State Street said the acquisition would broaden its presence overseas, as the Intesa unit has offices in Italy and Luxembourg. State Street anticipates financing the transaction with available capital.
The deal includes the global custody, depository banking, correspondent banking and fund administration components of the securities services operations. About 555 employees will join State Street when the deal is closed.
The transaction may also include about $16 billion in cash deposits if levels stay consistent with those as of June 30.
Additionally, State Street expects to support the acquired Intesa balance sheet with approximately $800 million of additional capital at the closing
As part of the acquisition, State Street will enter into a long-term investment servicing arrangement with Intesa to service all of its investment management affiliates, including Italy’s biggest fund manager, Eurizon Capital no credit check payday loan.
State Street anticipates about $120 million in acquisition-related costs over a five-year period, with most costs taking place in the first three years.
The Boston company expects to save about $90 million over five years and sees the deal modestly adding to its fiscal 2010 earnings.
The acquisition is expected to close in the second quarter.