Nuveen to buy Schroders for $13.5 billion forming asset management giant

Schroders soared to the top of the Stoxx 600 on Thursday, hitting a 52-week high, after U.S. fund management giant Nuveen said it would buy the U.K.’s largest standalone asset management.

The deal, sized at £9.9 billion ($13.5 billion), will create one of the world’s biggest asset management groups.

Nuveen — the investment management arm of the Teachers Insurance and Annuity Association of America (TIAA), a pensions and insurance group — will acquire Schroders for up to 612 pence per share.

The deal will create a global fund management behemoth with almost $2.5 trillion in assets under management, including $414 billion in combined private markets assets.

Shares in London-listed Schroders were up over 28% in morning trade following the announcement.

Under the agreement, the Schroders brand will be maintained, with the company remaining headquartered in London. Established in 1804, Schroders currently manages about £824 billion in assets, almost two-thirds of which are in the EMEA region.

Nuveen manages about $1.4 trillion in assets, 94% of which are in the Americas.

The transaction will deliver “an attractive premium in cash” to shareholders, Elizabeth Corley, chair of Schroders, said in a statement.

Group CEO Richard Oldfield added that the deal will “significantly accelerate our growth plans to create a leading public-to-private platform with enhanced geographic reach and a strengthened balance sheet.”

“This transaction is about unlocking new growth opportunities for wealth and institutional investors around the world by giving our leading, differentiated public-to-private platform a broader global presence,” said Nuveen CEO William Huffman.