|
New York, NY - AXA Financial, Inc. (NYSE-AXF) Alliance Capital Management L.P.
("Alliance Capital") (NYSE-AC) and Sanford C. Bernstein, Inc. ("Bernstein") announced
today they have entered into a definitive agreement whereby Alliance Capital will acquire
the assets and liabilities of Bernstein for an aggregate current value of approximately
$3.5 billion. The consideration will consist of approximately $1.5 billion in cash and
40.8 million newly issued Alliance Capital private L.P. units. Upon completion, AXA Financial's
ownership position in the new combined entity will be approximately 53%. The transaction is
expected to close in the fourth quarter 2000.
Following the acquisition, Alliance Capital will have approximately $475 billion in assets
under management (AUM) and annual revenues of about $3.2 billion. The combined firm,
which will have about 4,000 employees, will manage investment assets for approximately
2,600 institutional and 15,000 private client accounts, as well as $189 billion in mutual
fund assets and 5.8 million mutual fund shareholder accounts worldwide.
"We are both pleased and excited to add Bernstein to our family of impressive financial
services brands. Bernstein's reputation for high quality value research and investment
services is highly complementary and adds important diversity to our advice-driven strategic
thrust. Bernstein's expertise in value research offerings in the private client and
institutional markets is world acclaimed. This transaction diversifies AXA Financial's
revenue sources and further balances our extensive financial service capabilities," noted
Edward D. Miller, Chief Executive Officer of AXA Financial, Inc.
"In addition to the complementary fit and benefits at the AXA Financial level, we see
further extensions to our planning and advisory business. AXA Advisors, a unit of AXA
Financial, is already a major distributor of Alliance funds and this adds to our ability
to have available value style investment product to assist our clients in managing and
diversifying their wealth. Our 7,500 advisors will be in a position to offer Bernstein
products as part of our expanding open architecture product model. Likewise, Bernstein's
high net worth clients could benefit from financial planning products such as variable
life and annuities," said Mr. Miller. "This combination meets all of our key criteria:
added distribution, strong brand, value-added advice focus with a highly regarded group
of experts. It also builds scale and strength in our key businesses. The combination
will add approximately $86 billion in assets under management, making AXA Financial
one of the largest asset managers with pro-forma assets under management of $583
billion. Additionally, pro-forma product sales for 1999 for AXA Financial increases
by nearly $20 billion," Mr. Miller added.
Lewis A. Sanders, Chairman and Chief Executive Officer of Sanford C. Bernstein, Inc.,
said, "The Alliance Capital - Bernstein combination is not about cost reduction; there
is only modest overlap. It is about bringing together two outstanding organizations
with highly complementary skills. The scale and balance of the combined firms should
lead to high client satisfaction and therefore faster and more predictable growth.
Another distinct benefit is the increased ability to leverage products, technology
and services between our Private Client Group and AXA Advisors. Clearly both firms
are focused on providing objective, trusted financial planning and advice."
Bruce W. Calvert, Chief Executive Officer of Alliance Capital said, "We are very pleased
to be joining forces with Bernstein. Research excellence has long been the cornerstone
of efforts to provide superior performance for clients at both firms. Together, we will
have one of the premier equity and fixed income investment research capabilities in the
world, with 250 research analysts around the globe." Mr. Calvert added, "Alliance Capital
is a recognized leader in the growth style of investing; Bernstein in the value style.
By continuing to pursue each firm's distinctive style, we will be able to compete
effectively for institutional investment management assignments in any of the world's
major markets. This combination also provides the opportunity to further strengthen
our relationship with AXA Advisors, which has become a primary distributor of our
investment products."
Structure Of The Transition
"We believe this transaction will provide higher and more stable earnings growth for AXA
Financial. AXA Financial expects the transaction to be accretive on a GAAP basis in the
first year after adjusting for the effects of goodwill related to the transaction. The
transaction will provide AXA Financial with a more balanced mix of earnings through the
expansion of Investment Management segment earnings," noted Mr. Miller.
The definitive agreement provides for the acquisition of substantially all of the assets
and liabilities of Sanford C. Bernstein, Inc. by Alliance Capital Management L.P. The
consideration for the acquisition will be approximately $1.5 billion in cash and 40.8
million of newly issued Alliance Capital private L.P. units which approximates 10-11
times estimated cash flow. The total consideration for the acquisition may be adjusted
downward if a certain base level of Bernstein client revenues is not achieved at closing.
AXA Financial, Inc. has agreed to purchase approximately $1.6 billion worth of newly
issued Alliance Capital private L.P. units to provide Alliance Capital with the cash portion
of the consideration. This purchase will occur on Wednesday, June 21 for approximately
33 million new Alliance Capital private L.P. units. AXA Financial will initially fund
the transaction with available cash and bank debt.
Upon completion of the transaction, AXA Financial will have 53% ownership of the new
combined entity. AXA Financial has agreed to provide liquidity to Bernstein after
a two-year lock-out period to allow the 40.8 million units issued to Bernstein to be
sold to AXA Financial over the following eight years, but generally not more than 20%
of such units may be offered to AXA Financial in any one year.
The transaction is subject to certain regulatory approvals and approval by Alliance
Capital Management L.P. Holding ("Alliance Holding") (NYSE: AC) unitholders and Bernstein
shareholders.
AXA Financial, Inc. has been jointly advised by Donaldson, Lufkin & Jenrette
and Goldman, Sachs & Co.
About AXA Financial
AXA Financial, Inc., with approximately $500 billion in assets under management, is one
of the world's premier financial services organizations through its family of strong, well
recognized brands: The Equitable Life Assurance Society, AXA Advisors, Donaldson, Lufkin
& Jenrette (DLJ), DLJdirect, Pershing, iNautix and Alliance Capital. AXA Financial is a
member of the global AXA Group, which has operations in approximately 60 countries and has
more than $700 billion in assets under management. For more information on AXA Financial,
visit our Website at http://www.axa-financial.com.
About Alliance Capital
Alliance Capital is a leading global investment management firm with $394 billion in
assets under management at March 31, 2000. Alliance Capital manages retirement assets
for many of the largest U.S. public and private employee benefit plans (including 28 of
the U.S. Fortune 100 companies), for public employee retirement funds in 31 out of the
50 U.S. states, and for foundations, endowments, banks, and insurance companies worldwide.
Alliance Capital is also one of America's largest mutual fund sponsors with approximately
5.8 million shareholder accounts and a family of diversified fund portfolios that are
distributed globally. Alliance Holding owns approximately 42% of Alliance Capital, the
operating private partnership. AXA Financial owns interests in both Alliance Holding and
Alliance Capital amounting to an approximate 57% economic interest in Alliance Capital.
About Bernstein
Sanford C. Bernstein, Inc. is the largest value-oriented manager of institutional assets
in the industry, operating in foreign markets as well as the U.S., in bonds as well as
stocks, and in emerging as well as developed markets. It also ranks among the largest
managers of private portfolios, with an emphasis on investment planning for taxable
assets and an array of proprietary techniques for managing taxable portfolios. Assets
under management total approximately $86 billion.
Bernstein was founded in 1967 to manage private investments, and its mission soon expanded
to include institutional asset management and investment research. Its much-quoted company
and industry research, embodied in the so-called Bernstein "black books," is recognized
as among the most thorough and thoughtful produced anywhere.
Bernstein, a privately owned company, employs a staff of 1,400 including some 450
investment professionals, about half of whom are shareholders or principals.
Forward Looking Statements
Certain statements included in this release are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks, uncertainties, and other factors that could cause
actual results to differ materially from future results expressed or implied by such
forward-looking statements. The most significant of such factors include but are not
limited to, the following: the performance of financial markets, the investment
performance of Alliance Capital's and Bernstein's sponsored investment products
and separately managed accounts, client acquisition and retention, general economic
conditions, future acquisitions, competitive conditions, and government regulations,
including changes in tax rates. We caution readers to carefully consider such
factors. Further, such forward-looking statements speak only as of the date on
which such statements are made. We undertake no obligation to update any
forward-looking statements to reflect events or circumstances after the date of
such statements.
|
