Bank of New York Mellon to acquire PNC unit for $2.1 billion

Bank of New York Mellon Corporation today entered into a deal to acquire the global investment servicing business of PNC Financial Services Group for $2.31 billion in cash.

The acquisition will propell BNY Mellon to the second biggest provider of fund accounting, administration and transfer agency services to fund managers globally. The acquisition will also double BNY Mellon's European asset base and increase its managed account assets to $80 billion.

PNC's Global Investment Servicing Inc. (GIS) business, is a leading provider of back-office processing for financial advisers, fund managers and brokers.

Under the deal, the New York-based BNY Mellon, which has $1.1 trillion in assets under management,  will pay $2.31 billion in cash, which includes taking $1.57 billion of stock and repayment of inter-company debt from PNC.

BNY Mellon plans to raise approximately $800 million in equity as part of the transaction and add $855 billion in assets under administration.

Stephen Wynne, the current CEO of GIS, will continue in his role, PNC said.

BNY Mellon has $22.3 trillion in assets under custody and administration, $1.1 trillion in assets under management, services $12.0 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day.

"This acquisition significantly strengthens our service offering and market share with asset managers and financial advisors, while delivering attractive returns to our shareholders," said Robert Kelly, BNY Mellon chairman and chief executive officer. "We expect the transaction to accelerate our growth, deliver economies of scale and strengthen our leadership position for Asset Servicing and Pershing."