ING sells off final Baring unit to American groups

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The Independent Online

The Dutch financial services group ING has agreed to sell Baring Asset Management to the US groups Northern Trust and MassMutual, making a net gain of €250m (£175m).

The Dutch financial services group ING has agreed to sell Baring Asset Management to the US groups Northern Trust and MassMutual, making a net gain of €250m (£175m).

The sales wrap up the integration of Baring, which ING bought for a symbolic £1 after its collapse in 1995.Baring, founded in 1762 and once England's oldest merchant bank, foundered after the Singapore-based trader Nick Leeson lost it £791m in trading derivatives.

The name Baring will disappear within ING. An ING spokeswoman said that the bulk of Baring's investment bank activities were integrated into ING's wholesale business from 1997, which was rebranded as ING in 2002. Baring's private equity activities were sold to management this year.

Analysts said the sales reflected ING's strategy of focusing on core activities.

The Chicago-based Northern Trust is set to acquire Baring Asset Management's Financial Services Group (FSG), which offers fund administration, custody and trust services, for £260m. The Massachusetts-based MassMutual said it would buy the investment management activities of Baring Asset Management for an undisclosed amount. These include about €26bn in assets under management and 100 staff. MassMutual said the unit would continue to operate independently under its current head, David Brennan.

At the end of September, the FSG had about €51bn in funds under administration, €23bn in custody and €26bn held in trust. It employs 770 people in London, Dublin, Guernsey, Jersey and the Isle of Man. The 175 staff in London will transfer to Northern Trust's offices in Canary Wharf.

Penelope Biggs, Northern Trust's head of corporate and institutional services for Europe, the Middle East and Africa, said there could be "fairly limited" job cuts over time, but in London the company may hire more people. She said it would take 18 to 24 months to integrate FSG.

Northern Trust, whose chairman is William Osborn, said the acquisition would cut earnings per share by 5 cents next year and boost them by 8 cents in 2006.

The two transactions are subject to regulatory approval and are expected to be completed before the end of the first quarter next year.

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