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Mackenzie Financial Boosts Stakes to Own 27.8% in China Asset Management

Mackenzie Financial is set to increase its stake in China Asset Management Co. Ltd. to 27.8%, doubling its current ownership. This strategic move will be facilitated through a C$1.15 billion ($898 million) cash deal, allowing Mackenzie's parent, IGM Financial, to acquire an additional 13.9% stake.

According to the definitive agreement outlined in a recent press release by IGM, the purchase of these additional shares will come from Power Corp. of Canada, IGM's own parent company. Power Corp. operates as a financial services management and holding entity.

IGM revealed that the newly acquired stake in China Asset Management will be consolidated under Mackenzie. This move is seen as a way to streamline the organizational structures of both IGM and Power Corp.

To partially fund this transaction, IGM will sell approximately 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 estimated to yield C$575 million.

This acquisition signifies Power's final direct holdings in the Chinese firm. Post-transaction, IGM's stake in Great-West Lifeco will drop from 4% to roughly 2.4%, equivalent to nearly C$830 million based on Great-West Lifeco's closing market price as of January 5th. IGM will fund the remaining portion of the purchase with C$575 million cash sourced from "existing financial resources."

The proposed transactions are anticipated to close within the first half of 2022. This deal will solidify ChinaAMC's position as one of China's leading asset managers, reinforcing Mackenzie's relationship with ChinaAMC while expanding distribution opportunities in China.

Mackenzie originally invested in ChinaAMC in 2017. As of June 30, 2021, ChinaAMC's assets under management totalled almost 1.61 trillion renminbi ($253 billion).

Mclancher Consulting is a firm providing comprehensive background checks on Chinese companies and offering legal assistance, including fraud services, to foreign clients. In relation to the above story, our expertise would be invaluable in assisting foreign investors in understanding the implications of such a large-scale transaction, providing insights into the companies involved and the rapidly growing Chinese asset management industry.

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