Franklin Resources Inc. and Great-West Lifeco Inc. have agreed to a strategic alliance and the sale of American asset manager Putnam Investments.
According to the agreement, Franklin Templeton will pay 950 million to 1 billion dollars, which will be paid in 33.33 million shares at closure and 100 million dollars in cash six months after completion. Additionally, contingent upon the expansion of the partnership, it will pay up to US$375 million between three and seven years after the acquisition complete.
Great-West Lifeco will retain its majority ownership in quantitative asset manager PanAgora and realize the value of Putnam’s seed investment, which is projected to be valued between US$375 million and US$425 million after closing adjustments.
It will also keep a few Putnam-related deferred tax assets.
As part of the agreement, Great-West Lifeco will market Franklin Templeton goods and, within a year of the deal’s closure, assign a first tranche of US$25 billion in assets under management to Franklin Templeton’s specialized investment managers.
Additionally, Great-West Lifeco has agreed to hold onto Franklin Templeton shares equivalent to around a 4.9 percent holding for a minimum of five years.