CIBC completes purchase of 41 percent of American Century Investments
TORONTO---CIBC announced today that it has completed the acquisition of a 41 percent equity interest in American Century Investments, a leading U.S.-based asset management company, for U.S.$848 million in cash.
The transaction will be immediately accretive and is expected to contribute approximately 15 cents per share to CIBC's earnings in 2012 on a cash basis.
American Century manages approximately U.S.$111 billion* in assets for a diversified mix of institutional, intermediary and retail investor clients. CIBC holds 10.1 percent of American Century's voting rights and appoints two representatives to its 10-person board.
"Our investment in American Century complements our strong Canadian asset management franchise and provides a platform for CIBC's growth internationally," said CIBC President and Chief Executive Officer Gerry McCaughey. "It also underlines our confidence in the long-term potential of the asset management business, which has attractive demographic and risk characteristics."
"Like CIBC, American Century has strong momentum in investment performance and asset inflows," said Victor Dodig, Senior Executive Vice-President, CIBC, and Group Head, Wealth Management. "We are delighted to begin leveraging our combined strengths for further growth in Canada, the U.S. and internationally."
American Century was ranked second among its peer group by Morningstar with 77 percent of assets held in four- or five-star rated funds as of July 31, 2011. It was also named the "Best Large Mutual Fund Company" at the 2009 Lipper Fund Awards.
"CIBC's distribution strength and strategic commitment to American Century Investments will help our firm as we execute our growth through diversification strategy," added Jonathan Thomas, President and Chief Executive Officer of American Century Investments.