Exchange-traded fund (ETF) provider WisdomTree is to pay $611 million in cash and shares to acquire ETF Securities’ European exchange-traded commodity, currency and short-and-leveraged business.
The deal will boost WisdomTree’s total assets under management to $66 billion, making it the ninth largest ETF shop in the world.
Wisdom Tree will pay ETF Securities $235 million in cash, of which $200 million will be funded by newly issued debt, and 30 million shares, which amount to an 18% stake in the US provider.
The shares’ voting rights will be capped at 9.9% and ETF Securities has agreed to customary lock-up, voting and standstill provisions.
‘We are very excited to meaningfully expand and enhance our presence and capabilities in the European market by adding ETF Securities’ market-leading commodity platform to WisdomTree’s differentiated European product offering,’ said Jonathan Steinberg, WisdomTree chief executive.
‘The acquisition will immediately add scale, diversification and profitability to our business in Europe, the second largest ETF market in the world and a growing and strategically important region for us and the entire industry.’
WisdomTree is the latest US ETF shop to expand its European operations. In April Invesco, which houses the PowerShares ETF brand, announced plans to acquire Source, while Franklin Templeton and Vanguard have increased their ETF offerings on the continent in recent months.