The Bank of Montreal has agreed a deal to buy F&C Asset Management for a cash payment of £708m.
F&C confirmed this week a deal has been struck for BMO to pay 120p per share to acquire F&C.
BMO is the fourth largest bank in Canada and already runs a range of mutual funds and exchange traded funds. It also has a full service investment advice division and a private banking arm,
Its global asset management arm had assets of around $130bn (£78m) at the end of April, making it the 75th largest money manager in the world.
The bank has total assets of around £543bn.
BMO chief executive William Downe says: “F&C advances BMO’s capabilities by adding scope and scale to our well-established portfolio of wealth management businesses.”
F&C chairman Kieren Poynter says: “F&C’s board of directors believes the offer represents an attractive valuation for F&C shareholders and a positive outcome for employees and clients.”
In a trading update this week, F&C announced its assets under management had fallen 11 per cent to £82.1bn in Q4 2013, down from £90.1bn in Q3.
The fall was driven by a £10.4bn withdrawal by life company Achmea after the end of its exclusivity deal in October.
PMI Independent Financial Advisers director John Stewart says: “This is further evidence of the price squeeze impacting on fund houses. We will continue to see more acquisitions like this.”