The two firms announced on Monday that they had entered into a definitive agreement worth $611m (£466m) that, if approved by the regulator, will see Wisdom Tree take on $17.6bn of ETF Securities’ assets across 307 products.
The deal, which is expected to take place in late Q1 2018, will boost Wisdom Tree’s total assets under management (AUM) to $66bn, making what Wisdom Tree claims will be the largest global independent ETP provider in terms of AUM, and the ninth largest ETP sponsor.
Under the terms of the agreement, Wisdom Tree will exchange $200m of newly issued debt plus $53m of cash and 30 million Wisdom Tree shares for the ETF Securities’ business.
As a result, ETF Securities will become the largest shareholder in the company with an 18% holding.
Jonathan Steinberg, Wisdom Tree chief executive and president, said the acquisition would add scale, diversification and profitability to its business in Europe which it views as a “strategically important region”.
He added: “The addition of this complementary and competitively positioned commodity business is an important development in Wisdom Tree’s strategy to establish itself as a differentiated and diversified ETP provider that can thrive globally and generate long-term shareholder value.”
Graham Tuckwell, founder and chairman of ETF Securities, said: “We are pleased to be selling our European exchange-traded commodity, currency and short-and-leverage business to Wisdom Tree and to become the largest shareholder in the company.
“ETF Securities has a strong cultural fit with Wisdom Tree as both firms have been built from scratch by teams who have worked closely together for many years and who show an entrepreneurial spirit in seeking to deliver innovative and market leading products for their customers.”
