State Street agrees to acquire Brown Brothers Harriman Investor Services for $3.5B

State Street buys BBH for a staggering amount

The businesses announced that State Street Corp. has agreed to purchase Brown Brothers Harriman & Co.’s investor-services unit for $3.5 billion in cash. BBH has been in discussions with suitors like BNP Paribas Securities Services and Northern Trust, according to Global Custodian, which also suggested that State Street may be a suitable match as an acquisition.

BBH’s Investor Services business, comprising custody, accounting, fund administration, global markets, and technology services, will be acquired by State Street under the terms of the deal. The purchase is expected to close by the end of 2021, subject to regulatory clearances and usual closing circumstances. BBH Investor Services personnel will transfer to State Street when the acquisition closes, and $5.4 trillion in assets under custody (AUC) will be transferred to State Street’s records, which already manage $31.9 trillion.

State Street Corporation president and chief executive officer Ron O’Hanley remarked that the investment servicing business has robust foundations, with revenue driven by global expansion in financial assets. This merger with BBH Investor Services helps them cement their position as the industry pioneer and leader.

Pioneers in their industry

They are strengthening their leadership role across an array of services, bolstering their presence in a number of critical areas, expanding their connections with many of the world’s largest asset managers and owners, and expanding their capabilities and scale. BBH Investor Services also provides them top personnel, particularly industry-leading service excellence and implementation quality.

BBH will remain to own and operate its own private banking and investment management operations after the purchase. Bill Tyree, managing partner of BBH, said that they have reached this choice after thorough examination of the present and future environment of the global securities service business, including how effectively to support and innovate for the expanding breadth and complexity of their customers’ servicing requirements.

State Street is the right partner, a firm that shares their fundamental principles of unsurpassed customer service, honesty, trust, and long-term sustainability dedication, he added. The BBH narrative and its destiny had become one of significant curiosity, as one of the less visible custodians when it came to visibility, announcements, and strategy, at a time when its rivals had altered business models in light of industry headwinds in a public and loud fashion. An emphasis on comprehensive front-to-back-office services, as well as goals in digital asset servicing and solutions, are among these developments.

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