London-based asset management firm Henderson Group (Henderson) has agreed to merge with the US’s Janus Capital Group (Janus) to form a leading global active manager. The new entity – Janus Henderson Global Investors (JHGI) – will have total asset under management (AUM) of more than US$320 billion and a combined market capitalisation of approximately $6 billion.
On October 3, the companies jointly announced that their respective boards of directors had unanimously agreed to an all-stock merger of equals. Henderson and Janus shareholders are expected to own approximately a respective 57% and 43% of JHGI’s shares on closing, based on the current number of shares outstanding.
The combined group will apply for admission to trade on the New York Stock Exchange as its primary listing, retaining Henderson’s existing listing on the Australian Stock Exchange.
Commenting on the announcement, Andrew Formica, chief executive of Henderson, said: “Henderson and Janus are well-aligned in terms of strategy, business mix and most importantly a culture of serving our clients by focusing on independent, active asset management.”
Dick Weil, chief executive officer of Janus, added: “This is a transformational combination for both organisations. Janus brings a strong platform in the US and Japanese markets, which is complemented by Henderson’s strength in the UK and European markets. The complementary nature of the two firms will facilitate a smooth integration and create an organisation with an expanded client-facing team and product suite, greater financial strength, and enhanced talent, benefiting clients, shareholders and employees.”
The merger is currently expected to close in the second quarter of 2017, subject to requisite shareholder and regulatory approvals. Henderson and Janus believe there are opportunities for significant cost savings and revenue growth as a result of the move.
JHGI will be co-headed by the CEOs from Henderson and Janus. Its board of directors will comprise equal numbers of Henderson and Janus directors, with Henderson’s chairman Richard Gillingwater becoming chair of the combined board and Janus’s Glenn Schafer becoming deputy chair.
In addition, Janus’s largest shareholder, Japan’s Dai-ichi Life Insurance Co, has committed to supporting the merger and intends to extend its strategic partnership to JHGI.
Through the transaction, Henderson will also gain access to the investment knowledge of Bill Gross, who abruptly left Pacific Investment Management Co and joined Janus in 2014. According to The Wall Street Journal, he now manages a $1.5 billion unconstrained bond fund for the firm that has delivered a total return of 6.3% over one year, compared with a 5.2% total return for the Barclays US Aggregate Bond Index during that period.
As for its Asia Pacific business, Henderson’s Pan-Asia Executive Chairman Rob Adams will head up the Asia Pacific operations of JHGI. As of June 30, 2016, Henderson had around $2 billion in AUM from Asia ex-Japan, while Janus had about $7 billion in AUM from Asia ex-Japan and $16 billion from Japan. The companies had sourced $12 billion each in AUM from Australia at the same time.
