International commercial bank Merrill Lynch is believed to be poised to take a significant share of asset management company BlackRock, media reports have suggested.
According to the reports, the two companies are currently in talks to agree a deal which could involve Merrill Lynch transferring its investment management business into BlackRock in return for a large, minority stake in the company.
If such a tie-up were completed the resultant company would create a $1 trillion fund management heavyweight, The Wall Street Journal said.
Meanwhile the Financial Times reports that the move is a pivotal one for Merrill Lynch as it reflects the company’s desire to separate its investment management businesses from its retail broking networks. This is because a climate has developed where it has become more difficult for banks to sell in-house branded mutual funds through their own broker networks because recent regulatory problems in the US have heightened awareness of potential conflicts of interest.