BlackRock May Pay $13B for Barclays Unit

BlackRock (BLK Quote) could announce Wednesday it is buying the fund business of Barclays(BCS Quote) for $12 billion to $13 billion in cash and stock, a report says.

The acquisition would be BlackRock's largest acquisition and the largest in the asset-management industry, Bloomberg reports. BlackRock took over Merrill Lynch's asset-management business for $8.5 billion in 2006.

BlackRock would pay half the purchase price in cash and the rest in stock, leaving U.K. bank Barclays with a 20% stake in the combined company, Bloomberg reports, citing a person familiar with the matter. BlackRock is seeking to raise as much as $3 billion from sovereign wealth funds in Kuwait and Qatar, Bloomberg notes.

Terms of the deal were reported earlier by the Financial Times.

Barclays on Monday confirmed it has held talks with BlackRock for its Barclays Global Investors business but also said it has received proposals for BGI and its iShares business from a number of parties.

In a statement Monday, Barclays said the discussions aren't yet concluded and "there are a number of significant open issues which could affect the nature and terms of any transaction."

The Financial Times reported the bank was in talks Sunday with BlackRock about taking over BGI, but Bank of New York Mellon (BK Quote) was looking to step in if a deal isn't reached.

Barclays reached an agreement earlier this year to sell iShares, which specializes in exchange-traded funds, to CVC Capital Partners for $4.4 billion. But a "go shop" clause in the agreement gives Barclays until June 18 to get a better deal for iShares or BGI and pay a $175 million break-up fee to CVC.