Should BlackRock Acquire WisdomTree, And For How Much?

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Trefis
BLK: BlackRock logo
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BlackRock

  • WisdomTree is the only publicly traded company to focus entirely on offering ETFs (exchange-traded funds)
  • 5th largest provider of ETFs in the U.S. (by managed assets)
  • Prominent position in the nascent active ETF industry.

Why BlackRock would be interested in acquiring WisdomTree:

  1. Move aligned with BlackRock’s strategy of growing ETF offerings further
  2. Both companies offer complementary ETF products with minimal overlap
  3. BlackRock has been looking to expand its presence in active ETF market over recent years
  4. Acquisition will be accretive for BlackRock, provided the purchase price remains below $25 a share.

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The calculations assume that all cost synergies are realized immediately on acquisition. EBT Margin will improve as all overhead costs for WisdomTree will be eliminated, and total employee costs will fall from elimination of ETFs with similar investment strategies.

See the links below for more information and analysis about BlackRock:

Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment/ ask questions on the comment section
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to the full Trefis analysis for BlackRock

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