State Street Corp. announced today that it has signed definitive agreements with Deutsche Bank AG to acquire substantial parts of Deutsche Bank’s Global Securities Services business for up to US$1.5 billion in cash and stock.
State Street is acquiring Deutsche Bank’s global custody business with assets under custody of approximately 2.2 trillion euros, fund administration services, Depotbank services, securities lending, performance measurement, benefit payments businesses, and U.K. and U.S.-based domestic custody and securities clearing. At the time of closing, State Street will also assume approximately 3,200 employees worldwide, and operations in New York, Nashville, London, Frankfurt, Dublin, Edinburgh and Singapore.
Deutsche Bank will retain its sub-custody network in Europe, Latin America and Asia. Deutsche Bank will be State Street’s preferred sub-custodian in selected markets. As part of the agreement, State Street will provide global investment services to Deutsche Asset Management. Under the long-term agreement, State Street will provide custody, fund administration and global securities lending with the potential to expand the mandate to DeAM’s investment management affiliates.
Under the terms of the agreement, State Street will pay Deutsche Bank an initial payment of approximately US$1.2 billion at closing.
“This acquisition supports our strategy to expand State Street’s scope and scale as the premier partner serving the needs of sophisticated global investors,” said David Spina, chairman and chief executive officer of State Street.