Pimco Advisors Holdings L.P., one of the world's largest bond managers, agreed yesterday to sell a 70 percent stake in the company to Europe's second-largest insurer for $3.3 billion.
Pimco, of Newport Beach, Calif., ended months of speculation after it signed a definitive agreement to sell a majority ownership to Munich-based Allianz AG for $38.75 per unit of the limited partnership.
The combined companies, to be based in Munich, would have about $650 billion in assets under management and about 107,000 employees worldwide. The deal, subject to regulatory and shareholder approval, is expected to be completed by March.
The purchase is the latest example of global consolidation in the financial services industry, analysts said.
"The global market offers tremendous potential," said Philadelphia mutual fund consultant Burton Greenwald, who predicted that similar cross-border deals will follow the Pimco-Allianz merger.
Both Pimco and Allianz, which began merger discussions last year, have been actively seeking international partners to boost their sales worldwide.
"This will give us access and experience in 68 countries," said Ernest Schmider, Pimco's chief administrative officer.
For Pimco, the Allianz deal moves the company's diversification away from the maturing U.S. market and provides a deep-pocketed parent that can help it sell products around the world.
For its part, Allianz gets a well-respected U.S. bond manager that will serve as a foothold for expansion in the United States. A key attraction is Pimco's fixed-income unit, Pacific Investment Management Co., which accounts for about two-thirds of the company's assets, and its industry-leading Total Return Fund.