Franklin Resources, Inc. (NYSE: BEN) announced on Tuesday it entered into a definitive agreement to acquire Legg Mason, Inc. (NYSE: LM) for $50 per share of common stock in an all-cash transaction of $4.5 billion which will be funded from the company's existing balance sheet cash.
Franklin Templeton will also assume approximately $2 billion of Legg Mason's outstanding debt through the transaction. Legg Mason and its investment affiliates collectively manage over $806 billion in assets as of Jan. 31, 2020.
The deal has been approved by the boards of Franklin Resources and Legg Mason and is expected to close no later than the third calendar quarter of 2020. Once the transaction is complete, it's estimated the investment managers will have $1.5 trillion in assets under management.
"This is a landmark acquisition for our organization that unlocks substantial value and growth opportunities driven by greater scale, diversity and balance across investment strategies, distribution channels and geographies," said Greg Johnson, executive chairman of the board of Franklin Resources.
Franklin Resources shares were trading up 6% at $25.87 in Tuesday's session. The stock has a 52-week high of $35.82and a 52-week low of $23.96.
Legg Mason was up more than 23% at $50.32 per share.
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