The deal is made up of £4bn in cash and a 19.9 per cent stake in the new business. It includes the purchase of Barclays ETF business iShares and will see the combined business increase assets under management to £1.64 trillion.
In addition to the cash, Barclays will receive 37.784 million shares in the new firm, worth £4.2bn. The new company will be called BlackRock Global Investors and will employ 9,000 people in 24 countries.
Barclays agreed to sell iShares, which is part of BGI, to CVC Partners for £3bn in April but was allowed to seek better offers until June 18.
With the BlackRock offer now agreed by Barclays management, CVC has five days to respond with a better offer or the Barclays board will put the BlackRock offer to shareholders.
If the BlackRock deal goes ahead, BGI chief executive Blake Grossman will become vice-chairman of the new business. Barclays group chief executive John Varley and chief group president and chief executive of investment management Bob Diamond will join the BlackRock board. The deal would see BlackRock Global Investors overtake State Street Corporation as the world’s largest asset manager.
Blackrock chairman and chief executive Laurence Fink says: “The combination of active and passive investment products will be unsurpassed.”