Bank of America has agreed to sell the stock and bond mutual fund business of its Columbia management unit to Ameriprise Financial (AMP) for $1.2 billion – reported Nasdaq citing Dow Jones Newswires. Bank of America has said that it would retain Columbia’s cash-management business.
Columbia’s long-term asset-management business, which includes the Columbia mutual funds and other private assets managed by Columbia, had about $165 billion in equity and fixed-income assets under management as of June 30.
Earlier, Bank of America had said that it would sell Columbia as part of a plan to raise capital. Bank regulators had told Bank of America to raise $33.9 billion after the government conducted a stress test of the nation’s biggest banks. The bank finished raising the capital as mandated earlier this year, but indicated it would proceed with a sale of Columbia.
Once the transaction closes, Ameriprise’s asset-management business is expected to have global assets under management of nearly $400 billion. Jim Cracchiolo, chairman and CEO of Ameriprise, said: “The deal transforms our asset-management business, a core component of our integrated- business model, and will significantly accelerate our growth,” reported the news wire.
