IGM Financial Inc. unit Mackenzie Financial Corp. agreed to acquire a 10% interest in China Asset Management Co. Ltd. for about C$468M.
The Chinese asset manager had total AUM of about C$215.2 billion at June 30 and currently serves over 400 institutional mandates and 40 million retail investors.
Mackenzie Investments could increase its equity position in China Asset Management by an additional 3.9% in January 2017 through another purchase agreement. Both transactions involve separate nonstrategic shareholders that are state-owned enterprises in China.
IGM Financial expects to finance the transaction with a combination of existing cash and the issuance of debt and/or preferred shares in the first half of 2017. The deal is expected to be accretive to IGM Financial's earnings in the first full year of ownership.
The transaction is subject to closing conditions, including Chinese regulatory approvals, and is expected to close in the first half of 2017.
BMO Capital Markets acted as financial adviser to IGM Financial in connection with the transaction.
IGM Financial is a member of the Power Financial Corp. group of companies.