State Street To Terminate Proposed Deal To Buy Brown Brothers Harriman’s Investor Services Unit

Financial services provider State Street Corp. (STT) announced Wednesday that it has mutually agreed with Brown Brothers Harriman & Co. (BBH), a financial services firm, to terminate its proposed acquisition of BBH’s Investor Services business.

The decision was taken after it became clear that State Street will be unable to obtain necessary approvals from its regulators for the agreed deal.

BBH said it has no other plan to sell the Investor Services business or to pursue another transaction.

According to State Street, the proposed modified transaction structure was increasingly complex, presented additional operational risk to State Street and would limit the anticipated transaction benefits relative to original expectations

The Investor Services business includes associated technology, geographic scope, competitive dynamics, and regulation.

Bill Tyree, Managing Partner of BBH, said, “It is disappointing that State Street’s inability to secure regulatory approval precluded the compelling vision that they brought to us. That said, we can now move beyond the State Street transaction and return our undivided attention to day-to-day service excellence, to being an employer of choice, and to shaping the many opportunities before us…”

The companies noted that the Sale and Purchase Agreement does not provide for a contractual penalty by either parties in connection with this termination.

In pre-market activity on the NYSE, State Street shares were trading at $75.40, up 2 percent.

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