Henderson Group merges with Janus Capital

Henderson Group agreed to buy Janus Capital Group, creating a $320 billion money manager as both companies seek to boost profit and assets in the face of rising competition from passive managers. The new combined entity will be named Janus Henderson Global Investors.

London-based asset manager Henderson Group agreed to buy US contender Janus Capital Group Inc in an all-share $6 billion accord to cut costs and boost profits amid growing competition from index funds run by top providers such as Vanguard Group.

Formica and Janus CEO Dick Weil will be co-chief executives of the merged firm.

Janus' largest shareholder, Daiichi Life, supports the deal, the firms said. The deal will drive an estimated $110 million in cost synergies starting in mid-2017, which are forecast to be fully realized within three years (at least 50% of which management is forecasting to occur within the initial 12 months post close).

But the merger is a blow for the London Stock Exchange, with the primary listing for the merged group moving to NY, with a secondary listing in Sydney.

Although dubbed a "merger of equals", the all-share merger gives Henderson's investors 57% of the combined group and Janus 43%.

Janus is a well-known asset manager with around $195 billion in assets under management.

"Others will say they wish they'd done it or they'll contemplate it as well", Formica said in a Bloomberg TV interview on Monday.

"There is very little overlap between the two companies with (Janus) having a strong presence in the USA and Japan and Henderson having a strong presence in the United Kingdom and Continental Europe", Christopher Harris, analyst at Wells Fargo Securities, said in a research note.