Seligman to Complement Asset Management Strengths, Bolster Hedge Fund Business and Expand Distribution Reach
MINNEAPOLIS — July 7, 2008 — Ameriprise Financial, Inc. (NYSE: AMP) today announced a definitive agreement to acquire the venerable asset management firm J. & W. Seligman & Co. Incorporated for a total consideration of $440 million. The transaction, which is likely to close in the fourth quarter of 2008, is expected to be accretive to Ameriprise Financial earnings and return on equity in 2009.
New York-based Seligman manages approximately $18 billion in assets in open- and closed-end funds, hedge funds and institutional accounts. Founded in 1864, Seligman is a privately-held company that manages the nation's first growth mutual fund and helped pioneer single-state municipal funds. Seligman is recognized in particular for its accomplished technology investment team, which manages several retail and alternative portfolios, including Seligman Communications and Information Fund.
The acquisition provides multiple benefits for Ameriprise Financial:
Threadneedle Global Equity Income Fund, managed by Stephen Thornber, pursues growth on a global basis. Most global equity funds are "growth-only" strategies, investing in stocks with the single purpose of achieving capital appreciation. This fund regards growth as a function of income and capital appreciation and emphasizes investing in stocks that pay high regular dividends. Over time, the combination of dividend income and capital appreciation may offer attractive and more consistent long-term growth potential.
Thornber is also co-manger of the Threadneedle Global Equity Fund, which ranked in the top 20th percentile of its Lipper peer group for both 3- and 5-year performance and has more than $700 million in assets.
Threadneedle Global Extended Alpha Fund, managed by Andrew Holliman, can take advantage of global opportunities through its long/short investment strategy to generate alpha, a risk-adjusted measure of above-market return. Unlike most long/short funds that focus solely on U.S. stocks, Threadneedle Global Extended Alpha Fund invests across world equity markets, providing investors with a global alpha strategy.
For years, leading institutions have taken advantage of investment strategies that involve simultaneously purchasing and selling securities—an approach known as long/short investing. These strategies can potentially enhance performance, while also managing risk. Threadneedle Global Extended Alpha Fund brings this approach to individual investors by combining traditional long investing with opportunistic short positions to pursue above-average growth from stocks around the world while maintaining risk at market-levels.
With the addition of the two new funds, Threadneedle now manages six U.S. retail funds:
"Seligman is an excellent strategic fit for Ameriprise Financial," said Jim Cracchiolo, chairman and chief executive officer of Ameriprise Financial. "We look forward to realizing substantial benefits from Seligman's experienced investment management team and broad retail, institutional and alternative asset distribution strengths.
"This transaction reinforces our growth strategy, and in particular our efforts to grow our higher-margin businesses. We are committed to prudent use of our capital, and we will continue to maintain strong capital and liquidity positions once this acquisition closes."
The acquisition will be funded through the use of cash on hand. The transaction is expected to have no impact on the company's share repurchase program. A majority of the anticipated synergies are expected to be realized through cost savings.
Seligman will retain its successful investment management teams and will continue to use its brand names under the RiverSource umbrella.
"This transaction will strengthen two great organizations, bringing together complementary talent that will create an even stronger asset management business," said Brian Zino, president of J. & W. Seligman. "As part of the larger Ameriprise Financial organization, Seligman will be well positioned to increase distribution, grow assets and expand our service offerings to clients and their advisors."
"This is an exciting acquisition that brings additional scale to our asset management business," said Ted Truscott, president of U.S. asset management, annuities and chief investment officer at Ameriprise Financial. "In Seligman we have found a strong complement to our broad-based, multi-boutique asset management strategy."
UBS Investment Bank acted as financial advisor and Ropes & Gray LLP acted as legal advisor for Ameriprise Financial. Merrill Lynch acted as financial advisor and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisor for Seligman.
Ameriprise Financial, Inc., is a diversified financial services company serving the comprehensive financial planning needs of the mass affluent and affluent.
For more information, visit ameriprise.com.
Ameriprise Financial Investor Relations:
Laura Gagnon
(612) 671-2080
laura.c.gagnon@ampf.com
Media Relations:
Ben Pratt
(612) 671-2080
benjamin.j.pratt@ampf.com
J. & W. Seligman
Kevin Danaher
(212) 850-1381
danaherk@jwseligman.com
Hank Green
Ben-Abraham Associates
(212) 867-0133
hank@benabe.com
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