The European Commission has approved the $13.5 billion takeover of BarclaysÔÇÖ investment arm by US asset management firm BlackRock.
Barclays shareholders backed the sale of Barclays Global Investors in June, as the UK-based banking giant sought to improve its balance sheet without taking aid from the UK government. It had previously relied on help from Middle Eastern governments to steer it through the financial crisis.
Under the terms of the takeover, BlackRock is to create a new company, BlackRock Global, of which Barclays will own 19.9 per cent, for a net gain of £5.3 billion.
The deal will double the size of BlackRock, making it the worldÔÇÖs largest money manager with $2.8 trillion of client funds on its books.
Despite there being some overlaps in services including retail asset management, the European Commission, which acts as a competition watchdog for the 27 countries in the European Union, could not find any reason to reject the deal.
ÔÇ£The proposed merger would bring together two leading global asset managers with differentiated asset management products and strategies,ÔÇØ the European Commission said in a statement.
ÔÇ£The combined firm would continue to face several effective competitors in all of the markets where it is present. The Commission therefore concluded that the proposed transaction would not raise competition concerns,ÔÇØ it said.
Headquartered in New York City, BlackRock was founded 20 years ago and now has employees in 21 countries, with a particular emphasis on business in the US, Europe, Asia, Australia and the Middle East.
It has managed to avoid many of the toxic assets that spelt trouble for firms such as Bear Stearns and American International Group during the financial crisis.
The transaction is expected to close in the fourth quarter of this year.
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