Sundaram Asset Management gets SEBI’s nod to acquire Principal AMC

Our Bureau Chennai | Updated on November 19, 2021

The combined business of both entities is expected to be about ₹50,000 crore.

Sundaram Asset Management Company, a 100% subsidiary of Sundaram Finance., has received regulatory approval to purchase the asset management businesses of Principal Asset Management Pvt. Ltd.

Sundaram will take the schemes managed by Principal India and acquire 100 per cent of the share capital of Principal Asset Management Pvt Ltd., Principal Trustee Company Pvt. Limited, and Principal Retirement Advisors Pvt. Ltd. The deal was originally announced in January 2021.

A statement said that the final regulatory approvals for purchasing from the Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI) have been received. The transaction is subject to compliance with SEBI prescribed processes and fulfilling mutually agreed conditions precedent to deal closure. As per regulatory requirements, there will be an ‘exit load free window’ for investors to redeem their investments, where such exit load is applicable.

“We endeavour to retain and absorb Principal India’s distribution franchise with minimal disruption to their commercial terms. The existence of the same back-office service provider (RTA) is expected to smoothen the transition for existing customers and distributors, said Sunil Subramaniam, Managing Director, Sundaram Asset Management Company.

Post deal closure, the schemes currently managed by Principal India and Sundaram will either be merged or renamed as Sundaram schemes in their respective categories. All investors and distributors of Principal India schemes will become investors/distributors of Sundaram. Thus, a wider range of equity schemes will be available to the more than two million combined investor base and to the strengthened distribution franchise across the country-wide network of 88 branches, it said.

"As Sundaram acquires our India asset management and retirement advisory businesses, our top priority is to ensure the best outcome and a smooth transition for our customers, distributors and employees," said Pedro Borda, Chief Operating Officer, Principal International.

The combined business of both entities is expected to be about ₹50,000 crore. “We will be able to leverage the combined platform to derive significant synergies. The focus for us will be on delivering a better experience to our investors and distribution partners,” said Harsha Viji, Executive Vice Chairman of Sundaram Finance.

Published on November 19, 2021

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