Merrill Lynch & Co. said Wednesday that it would buy Advest Group Inc., the U.S. retail brokerage arm of the French insurer Axa Financial.
The purchase, expected to close in the fourth quarter, would bring more than 500 financial advisers. Merrill would not confirm media reports that put the price at $400 million, but it said the deal would be would be neutral to 2006 earnings.
Advest, of Hartford, Conn., has 1,560 employees, including a private client group of 515 advisers in the Northeast, Midwest, and Florida. The group also includes muni-cipal bond businesses for retail investors in New York and Florida.
Robert J. McCann, the vice chairman and president of the Merrill's global private client group, said in a press release, "We are committed to growing our private client business, and this acquisition is another example of our execution of that strategy."
Jeffrey Harte, an analyst with Sandler O'Neill & Partners LP, said it was no secret that Merrill had been interested in expanding its private client group. "The question has often been: Whom could they buy?" he said.
Advest's retail brokerage and private client business could "fold very nicely into Merrill Lynch," Mr. Harte said. Advest's focus on retail brokerage is a good fit for Merrill, he said, especially because trading has started to recover.
The acquisition would increase Merrill's stable of 14,420 brokers by 3.6%. Since the end of 2003, the company's brokerage force has grown by 6.8%. Erik Hendrikson, a spokesman for the company, said it would continue to add brokers, through hiring or acquisition.
The deal would also give Merrill Advest's two other businesses: Boston Advisors, which manages $3 billion in equity and fixed-income portfolios for individual and institutional investors; and a capital markets group that includes equity, taxable fixed-income, and municipal capital markets businesses.
