NEW YORK -- Retail brokerage giant Merrill Lynch & Co. has agreed to combine its asset-management unit with money manager BlackRock Inc. for a nearly 50 percent stake in BlackRock.
The transaction, disclosed yesterday and expected to close in the third quarter, would transform BlackRock into one of the world's top money managers, with an asset base of around $1 trillion.
The deal comes after Wall Street investment bank Morgan Stanley ended widely reported talks for obtaining a stake in BlackRock and as more and more Wall Street firms are looking to smaller, more specialized competitors for alliances or acquisitions.
Merrill's stake in BlackRock will be 49.8 percent, and it will have a 45 percent voting interest in the combined firm, which will carry the BlackRock name.
PNC Financial Services Group Inc., which bought BlackRock in 1995 and owns 70 percent of the New York investment firm, will maintain a 34 percent stake in the new company.
Merrill Lynch is the second major Wall Street firm in less than a year to sell off its asset-management business. In June, Citigroup agreed to trade its asset-management business to Legg Mason Inc. for Legg Mason's broker-dealer business.