A different kind of June wedding
For weeks, rumours circulated about BlackRock buying BGI and several bidders for the Aviva Australia business. This month, it became official. BlackRock bought BGI while NAB trumped other bidders (ANZ, AMP, AXA – what is it with all these acronyms, eh?) to acquire Aviva. In other words, this month, the finance industry celebrated two weddings.
What will get interesting is how the acquired businesses (BGI and Aviva Australia) will be integrated with BlackRock and NAB/MLC respectively. Just like marriages, both parties have different personalities. BlackRock’s known for being a conservative player that managed to ride the crisis well while BGI was Barclay’s growth engine that thrived on innovative products (ETFs, some quant strategies). Then you have NAB/MLC which also has a different culture to Aviva Australia.
But such is the nature of down markets. It’s an opportunity to either buy up or re-evaluate strategies. Unlike weddings though, marriages in the finance industry this time around don’t come with glasses of champagne. There’s no honeymoon as the acquirer gets down to the nitty-gritty of making sure the marriage works.
But there is cause for celebration. BGI didn’t go to CVC (that would have either destroyed the brand or only delayed the eventual sale to another company) and NAB/MLC/Aviva resets the industry dynamics. Let’s toast to both marriages delivering better value for investors.
