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Franklin Resources is buying competitor Legg Mason for $4.5 billion (all figures U.S. dollars), creating a financial company with a combined $1.5 trillion in assets under management.

Franklin Resources Inc., which operates as Franklin Templeton, said Tuesday that it will pay $50 for each Legg Mason Inc. share. It will also assume about $2 billion in outstanding debt.

The deal strengthens Franklin Templeton’s presence in key geographies and creates an investment platform that’s well balanced between institutional and retail client assets under management.

“This is a landmark acquisition for our organization that unlocks substantial value and growth opportunities driven by greater scale, diversity and balance across investment strategies, distribution channels and geographies,” said Greg Johnson, the executive board chairman at Franklin. “Our complementary strengths will enhance our strategic positioning and long-term growth potential, while also delivering on our goal of creating a more balanced and diversified organization that is competitively positioned to serve more clients in more places.”

Nelson Peltz’s Trian Fund Management LP and funds managed by it, own approximately 4.5% of Legg Mason’s outstanding stock and have entered into a voting agreement in support of the transaction. Shares of Legg Mason jumped more than 23% before the opening bell after the holiday weekend, while Franklin Resources’ stock surged 12.5%.

“The combination of Legg Mason and Franklin Templeton will quickly leverage our collective strengths, while minimizing the risk of disruption. Our clients will benefit from a shared vision, strong client-focused cultures, distinct investment capabilities and a broad distribution footprint in this powerful combination,” Legg Mason CEO Joseph Sullivan said.

The combined company will operate as Franklin Templeton and be headquartered in San Mateo, California. It anticipates approximately $200 million in annual cost savings. Legg Mason is based in Baltimore.

The deal, which was approved by both companies’ boards, is expected to close no later than 2020’s third quarter. It still needs approval from Legg Mason shareholders.