Invesco (IVZ) in merger talks with State Street Unit (STT)

Invesco Ltd. IVZ discusses a possible merger with State Street SocietySTT’s asset management activity. The news was first reported by the Wall Street Journal, citing people familiar with the matter.

State Street’s asset management division manages assets worth nearly $ 4 trillion. So, if a deal comes to fruition between the companies, it will be considered one of the biggest in the industry in recent times.

Talks are still in their early stages and none of the companies have commented on it yet.

The news comes just days after State Street announced its intention to acquire the investor services business of Brown Brothers Harriman & Co. (“BBH”) for $ 3.5 billion with the aim of increasing and to expand its main activity of depositary of investment services. companies.

Once the deal is done with BBH, BBH Investor Services employees will move to State Street and its massive assets in custody (AUC) will be transferred to the State Street books. This will put the Boston-based company ahead of BNY Mellon BK in terms of AUC, making it the global leader in asset services.

Notably, Invesco, with its strong balance of assets under management, strong global presence, diversified product offerings and alternative investment strategies, continues to be well positioned to attract investors, which will likely continue to contribute to growth in turnover. The company has a strong institutional pipeline and a strong retail network, which, combined with synergies from opportunistic acquisitions, will support further revenue growth.

So far this year, shares of Invesco have gained 42.8% while those of State Street are up 19.6%.

Image source: Zacks Investment Research

Currently, Invesco and State Street carry a Zacks Rank # 3 (Hold). You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.

Our opinion

In recent times, acquisitions have increased in the finance industry. In the current scenario, banks are moving towards consolidation to avoid the increased costs of regulatory compliance and increased investment in technology in an effort to remain competitive. The prevailing low interest rate environment and other economic challenges following the pandemic have weighed on bank profitability.

Last month, Seacoast Banking Corporation of Florida SBCF, the holding company of Seacoast National Bank, announced two separate merger agreements. He agreed to acquire Sabal Palm Bancorp, Inc., the parent company of Sabal Palm Bank based in Sarasota, FL, and Business Bank of Florida, Corp., the parent company of Florida Business Bank based in Melbourne, FL. Both agreements are expected to be concluded in the first quarter of 2022.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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