Analysis: Schroders' Acquisition Deal May Trigger Sale of Non-core Assets

Deutsche Numis Research stated in a research report that Nuveen's acquisition of Schroders Investment could mean that the non-core parts of the merged business face the risk of being sold off, thereby reducing the acquisition price of this UK asset management company. Analysts David McCann and assistant analyst Jonas Dohlen wrote that these three divisions—the company's “jewel in the crown” private bank Cazenove, its joint venture with Axis in India, and the financial advisory platform Benchmark—could have a combined value between £2 billion and £3.3 billion. They added that these businesses are relatively small, accounting for only 9% of assets under management, and in the context of the merged group, these businesses can arguably be considered strategically inconsistent. Selling these businesses could significantly reduce the effective price of the £9.9 billion deal, as well as lower complexity and minimize distractions.

Editor: He Yun