State Street to acquire BBH Investor Services in $3.5bn deal

Financial services firm State Street has agreed a deal to acquire Brown Brothers Harriman’s (BBH) Investor Services business for $3.5 billion.

The all-cash deal is expected to close by the end of the year

The agreement will see State Street take ownership of BBH Investor Service’s custody, accounting, fund administration, global markets and technology services.

BBH will continue to own and run its separate Private Banking and Investment Management businesses upon completion of the deal, which is expected to close by the end of the year subject to customary conditions.

Based in Boston, Massachusetts, State Street provides financial services to institutional investors including investment servicing, management and research and trading.

It currently boasts $3.9 trillion in assets under management and $42.6 trillion in assets under custody and/or administration.

The company says the deal is “an important enhancement” to its products and services and will help strengthen its position in the asset investment space and expand its global reach, with plans to increase its presence in markets such as Japan, Luxembourg, Ireland, and Latin America.

The firm announced plans earlier this week to set up a 400-strong team in Ireland to boost its cybersecurity operations.

BBH’s Investor Services business, which provides financial services to asset managers and financial institutions, currently has around $5.4 trillion in assets under custody and operates in 90 countries.

Bill Tyree, managing partner of BBH, says: “We made this decision after careful consideration of the current and future landscape of the global securities servicing industry, including how best to support and innovate for the growing breadth and complexity of our clients’ servicing requirements.”

Following the completion of the deal, all BBH Investor Services employees will move to State Street.