Dominion Bond Rating Service says it does not anticipate any impact on the credit ratings of Merrill Lynch & Co. Inc. as a result of the announced merger of its US$544 billion ($628.21 billionn) fund management business with BlackRock Inc.

The deal, which is valued in excess of US$8 billion, is expected to catapult BlackRock into the top publicly traded investment fund management firm with assets under management of almost US$1 trillion. Structured as a share exchange, the deal will give Merrill Lynch an approximate 50% ownership stake in BlackRock, replacing PNC Financial Services Group, Inc. as the largest shareholder. The remaining shares are held by employees and public shareholders.

DBRS says it views this transaction positively. “The announcement is consistent with Merrill Lynch’s objective to increase the offering of alternative asset classes,” it says. “The company will benefit from being part of BlackRock’s strong market reputation and highly regarded management team. Merrill Lynch will also benefit from its ownership stake in a more diversified asset management group.”

The rating agency also notes that BlackRock would benefit by doubling its asset size and diversifying its fixed income business through the addition of Merrill Lynch’s equity management capabilities and mutual funds products. The combined entity will also have a more balanced institutional and retail customer base.

DBRS says it believes Merrill Lynch is paying a rich price for its interest in BlackRock. In addition, DBRS notes that, as with most acquisitions of this nature, there is a risk of the loss of clients, as well as integration challenges.