Chase Manhattan Corp. said it has agreed to acquire the British investment bank and asset manager, Robert Fleming Holdings Ltd, for $7.7 billion in cash and stock.
The offer, which has been approved by Fleming's board but awaits regulatory and shareholder clearance, is made up of about $4.1 billion in cash and $3.6 billion in Chase common stock. Under terms of the deal, Chase will issue no fewer than 36 million shares and no more than 44 million shares.
The new company is to be called Chase Flemings.
As part of the deal, Flemings will exit an investment joint venture with T. Rowe Price Associates. Flemings has agreed to sell its 50% stake in the venture to T. Rowe Price for $780 million. Proceeds of the sale will accrue to Chase after the Flemings/Chase deal has closed.
``Flemings brings leadership positions in global asset management and international equities, excellent potential for earnings growth and a culture of partnership,'' William B. Harrison, Jr., chairman and chief executive officer of Chase, said in a statement. ``This transaction will benefit clients of both firms as we will be able to deliver a wider range of quality asset management, securities and investment banking products and services."
Mr. Harrison added that Chase is particularly interested in the way the deal will bolster its presence in Europe and Asia.
Chase currently has $232 billion of assets under management, primarily in fixed-income, cash management, and U.S. equities. Flemings has about $100 billion under management, approximately 80% of which lies in international equities.
The deal is expected to close in three to four months.
William Garrett, group chief executive of Flemings, will head Chase Flemings. He will report to Chase vice chairman Neal S. Garonzik.
