Transatlantic financial services M&A
Building a global asset manager
The asset management sector has seen the emergence of new competitors harnessing artificial intelligence to deliver investment advice at reduced margins. This has sparked a round of consolidations as established firms seek scale and synergies to shore up their market position.
It was against this backdrop that we advised global asset manager Henderson on its recommended all-share merger with Janus Capital, a global investment firm headquartered in Denver and listed on the New York stock exchange.
The deal, which closed in May 2017, created ‘a truly global active asset manager that is well positioned to succeed in the investment marketplace, with expanded product suites, greater financial strength and better talent’, in the words of Dick Weil, Janus Henderson’s co-CEO.
The combined group, Janus Henderson Global Investors, has assets under management of more than $320bn and a market capitalisation of approximately $6bn.
Three continents, three sets of rules
The deal raised legal challenges on three continents.
The UK/US nexus of the transaction required M&A and securities law advice in both London and New York. And because Janus’s largest shareholder was the Japanese insurance company Dai-ichi Life Holdings, the deal required a tripartite structure that gave Dai-ichi a continuing strategic stake through shares, warrants and board representation.
Approvals in 15 jurisdictions
The transaction was structured as a Delaware law-governed merger, and given Henderson’s LSE listing was also run as a reverse takeover under UK Listing Rules.
The fact that Henderson was also listed in Australia contributed to the regulatory complexity; approvals were needed in 15 jurisdictions in relation to change-of-control and fund regulation matters, requiring seamless, co-ordinated advice across the UK, the US, Canada, Hong Kong, Singapore, Jersey, Ireland, Australia and Switzerland.
An expanded geographic footprint
Henderson switched its listing from London to New York, only the third time a non-US company has entered the US public equity market in an M&A transaction valued at more than $1bn.
And because Henderson wasn’t a reporting company in the US, it had to prepare full US-style disclosure (including US GAAP financials) for the first time.
As well as creating cost synergies, Janus Henderson can cross-sell its expanded product range across a geographic footprint that now spans the US, Japan, Europe, Australia and Latin America.