A Canadian bank has agreed to buy a 41 percent stake in Kansas City-based American Century Investments, ending a 13-year relationship between American Century and JP Morgan Chase.
CIBC, based in Toronto, will pay $848 million for the shares that New York-based JP Morgan acquired in 1998 for $900 million. JP Morgan's original holding was 45 percent of American Century but it has sold some shares back over the years.
Neither deal involved control of American Century, the mutual fund company founded by James E. Stowers Jr. Although CIBC will have a 41 percent share of American Century's economic value, it will have only a 10.1 percent share of the voting stock in the company.
JP Morgan's purchase had allowed Stowers to fund the start up of the Stowers Medical Research Institute in Kansas City that pursues cures for cancer and other gene-based diseases. Stowers has given the bulk of his wealth to support the institute.
CIBC, which employs 42,000, currently manages $400 billion in investments for clients and provides other banking services in Canada.
American Century manages $112 billion and employs 1,300.
Each company sees the pending relationship as an opportunity to broaden their customer base in the others' national markets.
The sale is expected to be completed in 60 to 90 days.