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To bolster its capital base and get more focus, Bank of America (NYSE: BAC) has been in the process of unloading noncore assets. And, we got the latest deal today; that is, the company has agreed to sell its long-term asset management unit, Columbia Management, to Ameriprise Financial (NYSE: AMP). The price tag comes to roughly $1 billion.
Columbia is certainly a nice business, with a wide assortment of stock and bond mutual funds. One of its standout funds is the Acorn Fund, whose manager is Charles McQuaid.
In all, Columbia has about $165 billion in assets under management. Combined with Ameriprise, this will climb to about $400 billion, making it the #8 player in long-term mutual funds.
More importantly, the transaction will boost the earnings of Ameriprise within the year, which Wall Street loves. In morning trading, Ameriprise's shares were up 10% to $35.70.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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