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JPMorgan (JPM) on Buyout Spree Again, to Acquire Global Shares
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After last year’s acquisition spree, JPMorgan (JPM - Free Report) is again in the market, shopping. The company has inked a deal to acquire Ireland-based fintech firm – Global Shares. The deal value hasn’t been disclosed yet. The transaction, still subject to regulatory approvals, is expected to be wrapped up in the second half of 2022.
Shares of JPMorgan rallied 1.8% in yesterday’s trading in response to this favorable development and broader market positive sentiments.
Founded in 2005, Global Shares, through its cloud-based platform, helps businesses manage employee stock plans. The firm, through its offices across Europe, the Middle East & Africa, North America and the Asia Pacific, has more than 600 corporate clients as well as roughly $200 billion in assets under administration.
Tim Houstoun, the CEO of Global Shares, said,"We are tremendously excited to partner with J.P. Morgan and to continue on our journey of being a leading player in equity incentive services. Together, we will accelerate the expansion of our business globally as well as the range of services we offer to our clients and their employees.”
Following the closure of the deal, Global Shares will be integrated into JPMorgan’s Asset & Wealth Management (AWM) segment. The firm will continue to be based out of its current location.
Mary Callahan Erdoes, the CEO of AWM segment, added, “The addition of Global Shares is complementary across our entire J.P. Morgan franchise from new client acquisition for our Global Private Bank and U.S. Wealth Management businesses to providing new, innovative capabilities to private and public companies globally and helping their employees manage their wealth.”
Our Take
JPMorgan has been growing through on-bolt acquisitions, both domestic and international. In January, the company agreed to acquire a 49% stake in Greece-based Viva Wallet Holdings Software Development S.A., a cloud-based payments fintech company.
In 2021, the company announced several acquisitions. Some of the notable ones are a 75% stake in Volkswagen's payment arm Volkswagen Financial Services, OpenInvest, 40% stake in Brazil's C6 Bank, the U.K.-based robo-advisor Netmeg, and 55ip. In 2019, JPM acquired InstaMed, which has enabled it to expand into the lucrative U.S. healthcare payments market.
These deals, along with others, are expected to keep supporting the bank's plan to diversify revenues and expand fee income product suite and consumer bank digitally. JPMorgan is prioritizing strategic on-bolt buyouts to expand in new avenues of revenues.
Over the past year, shares of this Zacks Rank #4 (Sell) company have lost 14.6% compared with industry’s decline of 1.5%.
Also, JPMorgan is expanding its footprint in new regions by opening branches. In addition to enhancing market share, the strategy will help the company grab cross-selling opportunities. Also, it has launched its digital retail bank Chase in the U.K. and continues to expand CIB and AWM operations in China.
Other than JPM, several other global banks like Goldman Sachs (GS - Free Report) and Morgan Stanley (MS - Free Report) are expanding their businesses in China. Both these companies and JPMorgan have either approval for 100% ownership of their local securities joint ventures (JVs) or obtained a majority stake in their JVs.
Morgan Stanley is set to attain almost full ownership of its Chinese securities JV — Morgan Stanley Securities China Co Ltd — per a stock exchange filing in December 2021. The company will increase its stake in the JV to 94% after its partner — China Fortune Securities Co. Ltd — put 4.06% interest for sale. MS will pay 698 million yuan ($110 million) for the stake.
Likewise, Goldman had received approvals to own 100% of its onshore securities JVs in October 2021. JPMorgan, GS and MS have plans to expand further in the country to diversify revenues and expand their global footprint and market share.
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JPMorgan (JPM) on Buyout Spree Again, to Acquire Global Shares
After last year’s acquisition spree, JPMorgan (JPM - Free Report) is again in the market, shopping. The company has inked a deal to acquire Ireland-based fintech firm – Global Shares. The deal value hasn’t been disclosed yet. The transaction, still subject to regulatory approvals, is expected to be wrapped up in the second half of 2022.
Shares of JPMorgan rallied 1.8% in yesterday’s trading in response to this favorable development and broader market positive sentiments.
Founded in 2005, Global Shares, through its cloud-based platform, helps businesses manage employee stock plans. The firm, through its offices across Europe, the Middle East & Africa, North America and the Asia Pacific, has more than 600 corporate clients as well as roughly $200 billion in assets under administration.
Tim Houstoun, the CEO of Global Shares, said,"We are tremendously excited to partner with J.P. Morgan and to continue on our journey of being a leading player in equity incentive services. Together, we will accelerate the expansion of our business globally as well as the range of services we offer to our clients and their employees.”
Following the closure of the deal, Global Shares will be integrated into JPMorgan’s Asset & Wealth Management (AWM) segment. The firm will continue to be based out of its current location.
Mary Callahan Erdoes, the CEO of AWM segment, added, “The addition of Global Shares is complementary across our entire J.P. Morgan franchise from new client acquisition for our Global Private Bank and U.S. Wealth Management businesses to providing new, innovative capabilities to private and public companies globally and helping their employees manage their wealth.”
Our Take
JPMorgan has been growing through on-bolt acquisitions, both domestic and international. In January, the company agreed to acquire a 49% stake in Greece-based Viva Wallet Holdings Software Development S.A., a cloud-based payments fintech company.
In 2021, the company announced several acquisitions. Some of the notable ones are a 75% stake in Volkswagen's payment arm Volkswagen Financial Services, OpenInvest, 40% stake in Brazil's C6 Bank, the U.K.-based robo-advisor Netmeg, and 55ip. In 2019, JPM acquired InstaMed, which has enabled it to expand into the lucrative U.S. healthcare payments market.
These deals, along with others, are expected to keep supporting the bank's plan to diversify revenues and expand fee income product suite and consumer bank digitally. JPMorgan is prioritizing strategic on-bolt buyouts to expand in new avenues of revenues.
Over the past year, shares of this Zacks Rank #4 (Sell) company have lost 14.6% compared with industry’s decline of 1.5%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
Also, JPMorgan is expanding its footprint in new regions by opening branches. In addition to enhancing market share, the strategy will help the company grab cross-selling opportunities. Also, it has launched its digital retail bank Chase in the U.K. and continues to expand CIB and AWM operations in China.
Other than JPM, several other global banks like Goldman Sachs (GS - Free Report) and Morgan Stanley (MS - Free Report) are expanding their businesses in China. Both these companies and JPMorgan have either approval for 100% ownership of their local securities joint ventures (JVs) or obtained a majority stake in their JVs.
Morgan Stanley is set to attain almost full ownership of its Chinese securities JV — Morgan Stanley Securities China Co Ltd — per a stock exchange filing in December 2021. The company will increase its stake in the JV to 94% after its partner — China Fortune Securities Co. Ltd — put 4.06% interest for sale. MS will pay 698 million yuan ($110 million) for the stake.
Likewise, Goldman had received approvals to own 100% of its onshore securities JVs in October 2021. JPMorgan, GS and MS have plans to expand further in the country to diversify revenues and expand their global footprint and market share.