CIBC To Sell Minority Stake In American Century Investments To Nomura For $1 Bln

(RTTNews) - Canadian Imperial Bank of Commerce (CM.TO, CM) said it has agreed to sell its minority position in investment management firm American Century Investments or ACI to Japanese brokerage Nomura Holdings Inc. for about $1 billion.

CIBC acquired a 41 per cent equity interest in ACI in August 2011 for $848 million in cash. The company said that the sale, expected to be completed in the first half of 2016, will generate a gain of about $170 million, net of taxes, and an 11 percent internal rate of return for CIBC shareholders.

Victor Dodig, CIBC president and chief executive officer said, "Recognizing that a path to control was not going to be available over time, we made the decision to work with ACI to monetize our investment. Through this divestiture we will further strengthen our strong capital position and we are moving forward with a clear set of strategic priorities to drive our long-term growth."

CIBC noted that the sale will add about 50 basis points to its Common Equity Tier 1 ratio last reported as 10.8 percent, ending the fourth quarter of 2015. CIBC said it has maintained its medium term goals as outlined in its October 2015 Investor Day presentation.

Following closing of this transaction, ACI will continue to provide sub-advisory services to several funds and investment portfolios managed by CIBC Asset Management.