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Deals and People December 3, 2014
Northwestern Mutual Sells Russell for $2.7 Billion
Northwestern Mutual completed a $2.7 billion sale of its subsidiary Frank Russell Company, also known as Russell Investments, to the London Stock Exchange Group.
Reported by John Manganaro
The completion of the sale comes nearly six months after the London Stock Exchange Group (LSEG) announced its intention to acquire Russell from Northwestern and minority stockholders. The firms report the comprehensive review of Russell’s investment management business is “making good progress and is on track to be completed early in 2015.”
“Today marks a significant step for the [London Stock Exchange Group],” said Xavier Rolet, chief executive of LSEG, about the completion of the acquisition of Russell. “Russell significantly enhances LSEG’s presence in the U.S., the world’s largest global financial services market, further expanding our global footprint and diversifying our customer and product base.”
Rolet adds that LSEG is “delighted today to welcome Russell to the Group, and we are looking forward to working with new colleagues, new customers and new partners around the world.”
LSEG owns the FTSE Group, the operator of indexes including the FTSE 100, which tracks the top 100 stocks traded in London. The deal with Northwestern Mutual brings together $5.2 trillion of assets benchmarked to Russell, according to the firms, and an estimated $4 trillion of equities benchmarked to FTSE. Russell Investment Management has $256 billion of global assets under management and $2.4 trillion of assets under advisement through its consulting division.
For the London Stock Exchange Group, the deal will accelerate its diversification strategy and enhance its information services offering, particularly in the United States, the firm says. The deal also allows LSEG to further capitalize on key industry trends, such as growth in multi-asset solutions and passive investment strategies. According to LSEG, retention plans will be put in place for key Russell employees to drive performance.
“Russell has been a good investment for us,” said John Schlifske, chairman and CEO of Northwestern Mutual. “Russell’s operating results have made significant contributions to our financial results over the years. When you look at this sale price and the income produced for us since we bought Russell in 1999, you get a rate of return well in excess of equity indices over that period.”
Goldman, Sachs & Co. and J.P. Morgan Securities LLC acted as financial advisers to Northwestern Mutual on this transaction.
More information is available at www.lseg.com.