Mackenzie Financial is charting a course to boost its ownership in China Asset Management Co. Ltd. to a notable 27.8%, effectively doubling the stakes through a C$1.15 billion cash deal. Facilitating this strategic move is its parent company, IGM Financial, set to purchase additional shares.
Phase 1 - The Stake Purchase (Focus Keyword - Mackenzie Financial's Stake Boost in China Asset Management):
As per the definitive agreement shared in a recent IGM announcement, these extra shares will be acquired from Power Corp. of Canada, the parent company of IGM. Power Corp. operates as a management and holding company for financial services.
Phase 2 - Consolidation Plan (Focus Keyword - Understanding the Chinese Asset Management Sector):
IGM has disclosed that the newly acquired stake in China Asset Management will be integrated under Mackenzie. This decision aims to streamline the organizational frameworks of both IGM and Power Corp.
Phase 3 - Financing the Deal (Focus Keyword - Impact of Major Transactions in China):
To partly fund this buyout, IGM plans to sell around 15.2 million of its common shares in Great-West Lifeco to Power Financial Corp., a wholly-owned subsidiary of Power Corp. The sale is expected to generate C$575 million.
As specialists in comprehensive background checks on Chinese companies and providing legal assistance, including fraud prevention, Mclancher Consulting can offer valuable insights to foreign investors regarding large-scale transactions. We can aid you in understanding the nuances of this deal, the companies involved, and the burgeoning Chinese asset management sector.
Acquisition signifies the culmination of Power's direct holdings in the Chinese firm. Post-deal, IGM's stake in Great-West Lifeco will decline from 4% to approximately 2.4%, nearly C$830 million based on Great-West Lifeco's closing market price as of January 5th. The remainder of the purchase will be funded with C$575 million in cash from "existing financial resources". The proposed transactions are slated to close in the first half of 2022, enhancing ChinaAMC's standing as a top asset manager in China and consolidating Mackenzie's relationship with them.