Principal Financial Group, a Des Moines-based life insurance company, agreed Thursday to buy Bankers Trust Australia Group for $1.38 billion.
The acquisition would add $27.3 billion to Principal Financial's funds under management, bringing the total to $109.9 billion.
BT Australia, the Sydney-based funds management and investment banking operations of the former Bankers Trust Corp., was put on the auction block as part of Bankers Trust's sale to Deutsche Bank AG.
Deutsche Bank closed that $9 billion acquisition this month.
In addition to BT Australia's assets under management, Principal Financial also will acquire BT Australia's investment banking, portfolio management, and margin lending activities.
Analysts said the price was in line with their projections of $1.3 billion to $1.5 billion. Many, however, had predicted that Deutsche Bank would sell the funds management and investment banking operations in separate blocks.
A Deutsche Bank spokeswoman said the total proceeds from the sale would ultimately reach $2.17 billion, including a dividend for accumulated retained earnings Principal would pay after the deal's close.
The spokeswoman said she did not know when the deal would close.
A spokeswoman for Principal Financial refused to comment.
Analysts said the operations had been profitable but slow growing because Bankers Trust already had captured a substantial share of the Australian fund market.
Principal, which launched a pension fund management business in Australia in April, has been looking to expand in that country to take advantage of red-hot growth prospects in the pension market there, analysts said.
Principal, the eighth-largest U.S. life insurer, also has operations in Brazil, Japan, and the United Kingdom. It has 250 offices worldwide and $82.3 billion of assets under management, including $54 billion of pension fund assets.
As recently as a month ago, observers predicted that BT Australia would be sold to a major Australian bank.
Indeed, Westpac Banking Corp. had been in serious negotiations to buy the unit, but talks broke down two weeks ago, Deutsche Bank chairman Rolf E. Breuer said at a press conference in Philadelphia last week.
Ian Martin, the chief executive of the BT Funds in Australia, reportedly wanted to keep the unit autonomous as a condition of any sale. Westpac and other bidders were said to have chafed at that demand.
Deutsche Bank will maintain its existing operations in Australia, including a structured finance group, a corporate merger and acquisitions advisory group, and equity underwriting. In addition, it manages $24 billion in institutional funds there.