Mackenzie Investments Completes Acquisition of Power Corporation of Canada's 13.9% Equity Interest in ChinaAMC
Transaction increases IGM's participation in one of the world's largest and fastest growing markets
WINNIPEG, MB and TORONTO, Jan. 12, 2023 /CNW/ - IGM Financial Inc. ("IGM" or "IGM Financial") subsidiary Mackenzie Financial Corporation ("Mackenzie" or "Mackenzie Investments") today announced that it has closed the previously announced transaction to acquire Power Corporation of Canada's ("PCC") 13.9 per cent interest in China Asset Management Co., Ltd. ("ChinaAMC") for cash consideration of CAD$1.15 billion.
The transaction closed on January 12, 2023 and doubles Mackenzie's total interest in ChinaAMC to 27.8 per cent. The benefits of the transaction are expected to include:
- Enhancing participation in the rapidly growing Chinese asset management industry, through a meaningful ownership position in one of the leading asset managers in China.
- Reinforcing relationships and business opportunities between Mackenzie and ChinaAMC as Mackenzie builds global, fully diversified and differentiated solutions for its clients and strengthens distribution opportunities in China.
- Simplifying the IGM and PCC organizational structure by consolidating the ChinaAMC ownership position at Mackenzie.
- Providing a financially attractive outcome that is expected to be accretive to IGM's earnings near term.
"We look forward to expanding our relationship with ChinaAMC, who are well positioned to leverage the growth taking place in a market that's expected to represent a significant percentage of global net sales in the coming years," said Luke Gould, President and CEO, Mackenzie Investments. "Since 2017, Mackenzie and ChinaAMC have worked together to build a significant sales relationship, and we expect our increased interest will only strengthen growth opportunities between our two companies."
TRANSACTION DETAILS
As partial financing for the purchase of ChinaAMC shares, IGM sold 15,200,662 Lifeco Shares to a subsidiary of PCC, for aggregate consideration of approximately CAD$552.7 million, being a base purchase price of CAD$575 million based on the 5-day volume-weighted average price of Lifeco Shares at the close of business on January 5, 2022 of CAD$37.8273, less quarterly dividends received by IGM with respect to the Lifeco Shares declared after March 31, 2022 totalling CAD$22.3 million (CAD$1.47 per share). According to the terms of the transaction, the purchase price paid by PCC was adjusted for ordinary course quarterly dividends on the Lifeco Shares declared after March 31, 2022 and IGM is entitled to receive the annual ChinaAMC dividend on the 13.9% acquired interest that relates to periods ending after December 31, 2021. IGM funded the remaining portion of the purchase price with approximately CAD$597.3 million of cash from existing financial resources.
For additional details on the transaction, please refer to the IGM news release dated January 5, 2022.
IGM Financial Inc. is one of Canada's leading diversified wealth and asset management companies with approximately $249 billion in total assets under management and advisement at December 31, 2022. The company provides a broad range of financial planning and investment management services to help more than two million Canadians meet their financial goals. Its activities are carried out principally through IG Wealth Management, Mackenzie Investments and Investment Planning Counsel. IGM Financial is a member of the Power Corporation group of companies.
Mackenzie Investments is a leading investment management firm with $187 billion in assets under management as of December 31, 2022. Mackenzie provides investment solutions and related services to more than one million retail and institutional clients through multiple distribution channels. Founded in 1967, Mackenzie is a global asset manager with offices across Canada as well as in Boston, Dublin, London, Hong Kong and Beijing. Mackenzie is a member of IGM Financial Inc., one of Canada's premier financial services companies with approximately $249 billion in total assets under management and advisement as of December 31, 2022. For more information, visit mackenzieinvestments.com
Founded in 1998 as one of the first fund management companies in China, China Asset Management Co., Ltd. (ChinaAMC) has maintained a market leading position in China's asset management industry with total AUM of approximately RMB¥1.733 trillion (CAD$337 billion) at September 30, 2022. The company currently serves over 113 thousand institutional clients and 200 million retail investors. ChinaAMC boasts one of the industry's strongest investment teams with over 270 dedicated investment professionals. See fund.chinaamc.com for more information.
Forward-Looking Statements
Certain statements in this Release, other than statements of historical fact, are forward–looking statements based on certain assumptions and reflect IGM Financial's current expectations. Forward–looking statements are provided to assist the reader in understanding the Company's financial position and results of operations as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the benefits of Mackenzie's acquisition of PCC's 13.9 per cent interest in ChinaAMC, including expected accretion to IGM's earnings. Forward–looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "plans", "believes", "estimates", "seeks", "intends", "targets", "projects", "forecasts" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".
This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward–looking statements, including the perception of historical trends, current conditions and expected future developments, as well as other factors that are believed to be appropriate in the circumstances. While the Company considers these assumptions to be reasonable based on information currently available to management, they may prove to be incorrect.
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved.
A variety of material factors, many of which are beyond the Company's and its subsidiaries' control, affect the operations, performance and results of the Company, its subsidiaries, and ChinaAMC and their respective businesses, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to: the impact or unanticipated impact of general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, management of market liquidity and funding risks, changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates), the effect of applying future accounting changes, operational and reputational risks, business competition, technological change, changes in government regulations and legislation, changes in tax laws, unexpected judicial or regulatory proceedings, catastrophic events, outbreaks of disease or pandemics (such as COVID–19), the Company's ability to complete strategic transactions, integrate acquisitions and implement other growth strategies, and the Company's and its subsidiaries' success in anticipating and managing the foregoing factors.
The reader is cautioned that the foregoing list is not exhaustive of the factors that may affect any of the Company's forward–looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not place undue reliance on forward–looking statements.
Other than as specifically required by applicable Canadian law, the Company undertakes no obligation to update any forward–looking statements to reflect events or circumstances after the date on which such statements are made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Additional information about the risks and uncertainties of the Company's business and material factors or assumptions on which information contained in forward–looking statements is based is provided in its disclosure materials filed with the securities regulatory authorities in Canada, available at www.sedar.com.
SOURCE IGM Financial Inc.
Media Relations: Nini Krishnappa, IGM Financial, 647-828-2553, [email protected]; Investor Relations: Kyle Martens, IGM Financial, 204-777-4888, [email protected]
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