SEBI Approves Sundaram Asset Management to Acquire Principal AMC


Sundaram Finance subsidiary Sundaram Asset Management Company has got regulatory approval to procure the asset management businesses of Principal Asset Management.

Sundaram would take the schemes managed by Principal India and acquire 100 percent of the share capital of Principal Asset Management Pvt Ltd., Principal Trustee Company and Principal Retirement Advisors.

Sunil Subramaniam, Managing Director, Sundaram Asset Management Company says, “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.”

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

Harsha Viji, Executive Vice Chairman of Sundaram Finance says, “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.”

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.

Pedro Borda, Chief Operating Officer, Principal International states, "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."