As part of its continued expansion in Asia, Nikko Asset Management Co, Ltd. announced Monday it has reached an agreement to buy DBS Asset Management from DBS Bank Ltd.
In return, DBS Bank will become a strategic minority shareholder in Nikko, taking a 7.25% stake in the Tokyo-based firm.
This transaction would add $7 billion in assets under management to Nikko and broaden its distribution capabilities in Asia.
As part of this deal, Nikko and DBS Bank will enter into a non-exclusive distribution agreement through which Nikko’s investment products can be distributed through DBS's networks in core markets throughout Asia.
DBS is recognized as one of the leading investment management firms in Southeast Asia. Under the terms of the agreement, Nikko would receive DBS’ Singapore asset management subsidiary; the bank’s 30% stake in HwangDBS Investment Management Berhad, its Malaysian independent fund management arm; the bank’s 51% stake in Asian Islamic Investment Management, an Islamic fund management firm in Malaysia; and its Hong Kong fund management subsidiary.
A total of 107 staff will move to Nikko as a result of the deal.
DBS Asset Management’s 33% stake in Changsheng Fund Management, a joint venture fund management company in China, will not be part of the transaction and will be kept by DBS Bank. Nikko is already a 40% shareholder of Rongtong Fund Management Co., the sixth largest Sino-foreign joint venture fund management company in China.
The deal follows three weeks after Nikko signed an agreement to buy Tyndall Investments, an investment management firm in Australia and New Zealand, and entered into a strategic distribution alliance with Suncorp.
Nikko, which is based in Toyko, has said that it plans to expand distribution through Asia from its Japanese base. As a result of these two transactions, which are expected to close during the first quarter, Nikko will add approximately $32 billion of assets under management bringing its total to over $150 billion. In the process, it has also established strong positions in Australia, New Zealand and Malaysia as well as significantly enhancing its presence in Singapore and Hong Kong.