Reuters on BlackRock, BofA Deal
Below, we link and excerpt from more coverage of BlackRock's takeover of BofA Funds money fund assets. (See yesterday's News, "BlackRock Taking Over BofA MMFs in One of Biggest Acquisitions Ever.") Reuters writes in "BlackRock to buy Bank of America's $87 billion money-market fund business," "Bank of America Corp, the No. 2 U.S. bank, has agreed to sell its $87 billion money-market fund business to BlackRock Inc in one of the cash-management industry's largest deals ever. The transaction comes as big banks have faced pressure to simplify their businesses since the global financial crisis and marks the largest in a series of deals reshuffling the cash-management industry before costly regulatory reforms take effect in 2016. Terms of the transaction were not disclosed. The agreement is expected to lift BlackRock's global cash-management business to $372 billion from about $285 billion, according to the New York-based company.... Mergers and acquisitions trimmed the money funds industry from 75 providers in the United States last summer to just 67 this year, according to Crane Data, an industry research service. Once the deal closes next year, BlackRock will leapfrog JPMorgan Chase & Co to become the second largest money fund family, behind Fidelity Investments, according to Peter Crane of the research service.... "Everybody has been talking about consolidation for years, but it really didn't happen until today," said Crane. "So many large players have resisted getting out of the business until now, but it's just a matter of the costs and uncertainty of money fund reforms proving to be overwhelming to some players." Crane said Bank of America's decision came after an evaluation of which businesses were essential. "At the same time asset managers are trying to get bigger, banks are trying to get smaller," he said. "This reflects regulatory pressure on both sides."" See too WSJ's "Bank of America to Sell $87 Billion Money-Market Fund Business to BlackRock" and Bloomberg's "BofA Sells $87 Billion Money-Market Funds Unit to BlackRock".
