FleetBoston Financial Corp. has agreed to acquire Liberty Financial’s asset management units for nearly $1 billion, both companies announced yesterday.

FleetBoston will pay $900 million in cash and will assume approximately $110 million in revolving debt to finance sales commissions, according to Liberty. The sale is expected to close by the third quarter, according to FleetBoston.
Both companies are headquartered in Boston.
Fleet will acquire all of Liberty’s asset management and operations units which includes Colonial Management Associates of Montgomery, Ala., Crabbe Huson Group of Portland, Ore., Newport Pacific Management of San Francisco, Progress Investment Management of Boston, Stein Roe & Farnham and Liberty Wanger Asset Management, both of Chicago. The sale also includes Liberty Asset Management and its operations units including Liberty Funds Distributor, Liberty Funds Services, all of Boston.
The acquisition is expected to add $51 billion in assets under management to FleetBoston’s existing asset management businesses, bringing its total assets under management to approximately $173 billion, Fleet said. Through the acquisition, FleetBoston will go from the forty-second largest investment manager to the twenty-ninth largest, according to the company.
FleetBoston offers funds through its two subsidiaries, Columbia Funds of Portland, Ore. and Galaxy Funds of Boston. Columbia offers 15 no-load funds, separately managed accounts and private wealth management while Galaxy offers 30 funds that distributed through financial intermediaries.
As part of the sale, Liberty Financial has entered into an agreement in which it will become a wholly owned subsidiary of Liberty Mutual Insurance Company, according to Liberty. The transaction will give Liberty Financial stockholders $33.44 per share, according to the company.
“This transaction is the last major step to complete the sale of Liberty Financial Companies,” said Gary L. Countryman, president and CEO of Liberty Financial, in a statement. “We believe that joining with FleetBoston, a financial services leader committed to growing its asset management business, will benefit both our mutual fund and institutional customers.”

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