U.S. Custodian Bank State Street to Buy Investment Firm Charles River

U.S. custodian bank State Street Corp said on Friday it would buy Charles River Development, a privately held investment management firm, for $2.6 billion in cash.

The acquisition gives State Street a service platform through which clients would be able to get in and out of funds as well as access investment and portfolio data.

“Today’s announcement represents an important milestone in our digital and technology transformation,” Chief Executive Officer Jay Hooley said in a statement.

The bank, which reported a 15.4 percent rise in second-quarter profit, said it would suspend $950 million worth of share repurchases and issue fresh equity to finance the deal.

About two-thirds of the new equity would be in the form of common stock and the rest in preferred stock, State Street said.

The deal, which is likely to close in the fourth quarter, would add to the bank’s earnings in 2020.

State Street’s shares fell 3.4 pct to $89.58 in premarket trading.

(Reporting by Nikhil Subba in Bengaluru; Editing by Arun Koyyur)

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