BlackRock Inc. (BLK - Analyst Report) has agreed to buy Claymore Canada from Guggenheim Partners LLC. The announcement came out yesterday and it was said that both parties have entered into a definitive agreement in this context. With this deal, BlackRock would be able to expand its exchange-traded fund (ETF) business in Canada.
Claymore is based in Toronto and acts as an independent Canadian subsidiary of Guggenheim Funds Services Group, a subsidiary of Guggenheim Partners, LLC.
BlackRock, the leading asset manager in the world, currently manages $3.3 trillion in assets worldwide. The deal will result in addition of 34 ETFs and two closed-end funds, representing C$7.0 billion in asset under management. As of December 31, 2011, BlackRock offered 48 ETFs in Canada under the iShares brand, representing C$29.0 billion in assets under management.
The deal, which is subject to regulatory approvals and customary closing conditions, is likely to be accomplished by the end of the first quarter of 2012. The deal, whose terms are still undisclosed, is expected to be neutral-to-modestly accretive to BlackRock's 2012 earnings.
We believe that the acquisition of Claymore will provide BlackRock with competitive edge to grab market share in the Canadian ETF market and hence, is a strategic fit for the company.
BlackRock currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. Among its peers Federated Investors Inc. (FII - Analyst Report) also shares the same Zacks rank.