Marsh & McLennan Cos. Inc. of New York has agreed in principle to sell Putnam Investments to Power Corp. of Canada for $3.9 billion, according to sources at the fund company.
Power Corp. is Canada's largest mutual fund owner, but the deal, announced Friday, would be its first entry into the U.S. market.
The Montreal company owns almost two-thirds of Power Financial Corp., which owns majority stakes in Great-West Lifeco Inc. and IGM Financial Inc., the parent of the mutual fund companies Investors Group Inc. and Mackenzie Financial Corp.
Marsh announced plans to sell Putnam in September after three years of redemptions following a market-timing scandal in 2003.
The Boston unit agreed to pay $193.5 million in March 2005 to settle suits related to the scandal and reimburse shareholders, but its assets have fallen to their lowest level since 1997. As of Sept. 30 it had $187 billion of assets under management.
In the first 10 months of last year Putnam had $14.7 billion of redemptions, including $3.2 billion in October, according to data from Financial Research Corp.
The deal, expected to close early this year, needs the approval of Putnam's employees who own shares in the company, Putnam mutual fund shareholders, and the board that oversees the funds.
By midday Friday, Marsh's shares had increased 0.42%, to $30.85.
