State Street quits bidding for Credit Suisse ETF unit

NEW YORK Tue Dec 18, 2012 10:26pm IST

A logo is seen in front of a Credit Suisse building in Zurich, May 4, 2012. REUTERS/Christian Hartmann

A logo is seen in front of a Credit Suisse building in Zurich, May 4, 2012.

Credit: Reuters/Christian Hartmann

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NEW YORK (Reuters) - State Street Global Advisors has dropped out of the bidding for Credit Suisse's $17.34 billion European exchange-traded fund business, according to two sources familiar with the situation.

As first reported by Reuters, BlackRock Inc and State Street Global Advisors, the money management arm of State Street Corp, were among the first round of bidders for Credit Suisse's European ETF business in early October.

The investment banking arm of Credit Suisse is representing the parent company in the deal, sources said.

BlackRock is still looking at the business. It could not be determined if other bidders are competing with BlackRock, according to the sources, who declined to be named because the talks are confidential.

Spokeswomen for Credit Suisse, State Street and BlackRock declined to comment.

Credit Suisse's decision to sell its ETF business comes as the company is closing or reducing other parts of its business to raise capital to meet new regulatory requirements.

In November, Credit Suisse said it was integrating its private banking and asset management divisions into a new wealth management unit.

With 58 ETFs, Credit Suisse is the fourth largest provider in Europe, with 5.5 percent market share as of November 30, according to ETFGI, a London-based ETF research firm.

BlackRock is the largest ETF provider in Europe, with more than 41 percent of the $318 billion European ETF market. Its 195 European iShares ETFs had $132 billion in assets.

State Street's 44 SPDR ETFs in Europe had $3.7 billion in assets - 1.2 percent of the European market.

For BlackRock, the addition of Credit Suisse's ETF business would be the second international ETF business the firm has made this year.

In March, BlackRock bought Toronto-based Claymore Investments, a Canadian ETF operation, from Guggenheim Partners LLC.

In October, BlackRock Chief Executive Laurence Fink told Reuters it was looking at a "fill-in ETF acquisition in another country.

(Editing by Jeffrey Benkoe)