Sept 7 (Reuters) - State Street Corp said on Tuesday
it had agreed to buy investment bank Brown Brothers Harriman &
Co's (BBH) investor services business for $3.5 billion in cash,
strengthening its hand in the battle to be the world's biggest
The deal, which the companies said would include BBH's
custody, accounting, fund administration, global markets and
technology services operations, comes less than a year after
reports that State Street was looking to offload its other main
business, asset manager State Street Global Advisors.
A custodian bank holds customers' securities for safekeeping
to prevent them from being stolen or lost.
Adding BBH's $5.4 trillion in assets under custody to State
Street's $31.9 trillion portfolio will help the combined company
challenge Bank of New York Mellon for supremacy as the
market providing custodian and other administrative services to
the banking sector.
Founded in 1818 and headquartered in New York City, BBH
counts institutions, privately held companies, families and
wealthy individuals as its clients.
BBH will continue to operate its separate private banking
and investment management businesses after the sale of its
investor services unit, the banks said.
The deal, which is expected to close by the end of the year,
will also give Boston-based State Street access to BBH's
expertise in cross-border, alternatives, exchange-traded funds,
and other high-growth asset classes.
State Street Chief Executive Officer Ron O'Hanley said it
would enhance the bank's position and scale on a range of
services and markets and grow relationships with many of the
leading global asset managers.
Media reported late last year that the other half of the
bank's business, State Street Global Advisors, one of the
biggest asset managers in the world, was up for sale. Executives
have been mum on that deal since, which would align with
Tuesday's move to focus on the custodian business. https://reut.rs/3n9qMrT
Goldman Sachs & Co. LLC served as financial adviser to State
Street, while Lazard advised BBH.
(Reporting by Noor Zainab Hussain in Bengaluru; Editing by
Vinay Dwivedi and Patrick Graham)