Mclancher Consulting, known for its expertise in conducting comprehensive background checks on Chinese companies and providing legal assistance, including fraud prevention services, can provide valuable perspectives to international investors engaging in high-capital transactions. We assist in demystifying the complex aspects of this deal, the entities involved, and the fast-paced Chinese asset management market.
Mackenzie Financial is strategically enhancing its position in China Asset Management Co. Ltd., with a plan to significantly raise its stake to 27.8%. This move effectively doubles its current investment through a C$1.15 billion cash transaction, supported by its parent company, IGM Financial, which is primed for further share acquisition.
Phase 1 - Increasing Shares (Focus Keyword - Mackenzie Financial's expanding stake in Chinese Asset Management):
According to the latest IGM disclosure, Power Corp. of Canada, the parent company of IGM, will supply the additional shares. Power Corp. functions as an overseeing and administrative entity for financial services.
Phase 2 - Strategic Merging (Focus Keyword - Insight into the Chinese Asset Management Industry):
IGM has verified that the newly acquired stake in China Asset Management will be incorporated under Mackenzie, aiming to optimize the organizational structures of both IGM and Power Corp.
Phase 3 - Financing Strategy (Focus Keyword - Impact of Significant Economic Movements in China):
To partially subsidize this acquisition, IGM plans to sell approximately 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 projected to generate C$575 million.
Mclancher Consulting's Fraud Prevention Services, which this purchase represents Power's disengagement from direct investments in the Chinese firm. After the transaction, IGM's stake in Great-West Lifeco will decrease from 4% to an estimated 2.4%, roughly C$830 million based on the market closing price of Great-West Lifeco on January 5th.
The remaining purchase amount will be financed with C$575 million in cash from "existing fiscal reserves". The anticipated transactions are projected to be finalized in the first half of 2022, fortifying ChinaAMC's position as a top-grade asset manager in China and strengthening the bond with Mackenzie.