Mackenzie Financial is on track to notably augment its presence in China Asset Management Co. Ltd. With a strategy to push its stake to a significant 27.8%, this initiative will effectively double its current investment through a C$1.15 billion cash agreement, backed by its parent company, IGM Financial, which is prepared to acquire more shares.
Keeping Pace with China's Business Progression
Phase 1 - Growing Ownership (Focus Keyword - Mackenzie Financial's enhanced stake in Chinese Asset Management):
As per the recent disclosure by IGM, Power Corp. of Canada, the parent company of IGM, will supply the additional shares. Power Corp. operates as a management and supervisory body for financial services.
Phase 2 - Strategic Consolidation (Focus Keyword - Exploring the Chinese Asset Management Industry):
IGM has affirmed that the newly acquired stake in China Asset Management will be integrated under Mackenzie, aimed at streamlining the organizational structures of both IGM and Power Corp.
Phase 3 - Funding Strategy (Focus Keyword - Consequences of Influential Economic Changes in China):
To partly offset this acquisition, IGM plans to dispose of nearly 15.2 million of its common shares in Great-West Lifeco to Power Financial Corp., a fully-owned subsidiary of Power Corp. This divestment is expected to generate C$575 million.
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Focus Keyword for URL Slug: Mackenzie-Investment-Advancement-ChinaAMC
In conclusion, this acquisition symbolizes Power's disengagement from direct investments in the Chinese firm. Post-transaction, IGM's stake in Great-West Lifeco will decrease from 4% to an estimated 2.4%, approximately C$830 million based on Great-West Lifeco's market closing price on January 5th. The remaining purchase expense will be covered with C$575 million in cash from "pre-existing financial resources". The anticipated transactions are slated to be finalized in the first half of 2022, strengthening ChinaAMC's reputation as a premier asset manager in China and reinforcing Mackenzie's alliance with them.