Janus-Henderson Merger: Dominance in Global Markets
The Janus-Henderson merger will create a dominant position globally since both businesses complement each other. The combined entity’s assets under management will reach $331.0 billion, pushing it among the top 50 global asset managers and the top 20 US-based mutual fund companies. The combined company’s clients will be served with a global team consisting of 400 investment managers.
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Insights about the merger
The merger of Janus Capital Group (JNS) and Henderson Group (HGG) is a merger of equals, and as such, the CEOs (chief executive officers) of the two companies will jointly lead the newly formed company as co-CEOs. The merger is a stock-for-stock merger; that is, for each share of Janus common stock, the shareholder will receive ~4.7 Henderson ordinary shares in addition to cash for any fractional shares considering the prevailing market price. In the new company, Henderson shareholders hold 57.0%, and the remaining 43.0% belong to Janus shareholders.
Henderson will be implementing a share consolidation program of Henderson ordinary shares under which every ten Henderson ordinary shares outstanding will be consolidated into one Janus Henderson ordinary share. So for each share of Janus common stock, a Janus stockholder will receive ~0.47 Janus Henderson ordinary shares. The merger will give the combined business a diversified revenue mix, and meaningful operational synergies can be delivered. The merged company will cater to client needs globally and is positioned to compete and gain a larger market share compared to alternative asset managers (XLF) such as Affiliated Managers Group (AMG), Ameriprise Financial (AMP), and Apollo Global Management (APO).
Dai-ichi’s plan to increase ownership
Janus’s largest shareholder, Dai-ichi Life Insurance Company, which holds 20.0% of the issued share capital, voted in favor of the merger. It’s expected that Dai-ichi’s stake will dilute to 9.0% post-merger. Dai-ichi Life is expected to increase its ownership interest in the merged entity to a minimum of 15.0% and will also have a seat on the merged group’s board of directors.
Dai-ichi and its affiliates have given their support for the buildout of Janus’s non-US business. In December 2016, across various investment strategies, AM One (Asset Management One) has distributed $6.5 billion. Dai-ichi also plans to make further investments in Janus Henderson Group’s (JHG) product range up to a cap of $500.0 million. That will total $2.5 billion of committed invested assets in the merged group.