Barclays Chief Executive Officer Robert Diamond is selling assets and focusing on the lender's most profitable operations to help him meet his 13 percent target for return on equity, a measure of profitability. He sold the bank's consumer and commercial bank operations in Russia in October and a private equity unit in November. Diamond will step down from BlackRock's board following the sale, the fund manager said today.
Biggest Asset Manager
BlackRock paid Barclays 37.6 million common and preferred shares and $6.65 billion in cash to acquire Barclays Global Investors in 2009. BlackRock's shares surged 28 percent from the time it announced the transaction in June 2009 until the purchase was completed in December that same year, as the deal made the firm into the world's biggest asset manager and added passive products such as the iShares exchange-traded funds to its offerings.
"BlackRock's relationship with Barclays has always been strong and will remain so," Brian Beades, a spokesman for BlackRock, said in an e-mailed statement today. "Our plan to repurchase shares demonstrates BlackRock's commitment to effectively executing our capital management strategy and returning cash to shareholders through buybacks and dividends."
Blackrock said last May it had agreed to buy back Bank of America Corp.'s remaining stake of 13.6 million shares for $2.5 billion. The bank acquired its stake in the New York-based money manager through the purchase of Merrill Lynch & Co. in 2009.