signed an agreement to acquire the securities-services business of Italy's
for 1.28 billion euros ($1.87 billion).
State Street said Tuesday it expects to add $800 million of additional capital to the acquired business' balance sheet at closing. The Intesa Sanpaolo operations being acquired provide securities services in Italy and Luxembourg.
State Street also said, assuming the cash balances in the business are consistent with levels at June 30, it expects to acquire about $16 billion in cash deposits at closing.
The Intesa Sanpaolo subsidiary had 2009 revenue of about $427 million.
State Street said it expects to finance the acquisition with available capital. The closing of the acquisition is expected during the second quarter of 2010.
If the deal closes then, State Street said it expects to incur about $120 million in pretax merger and integration costs over five years, and would achieve about $90 million in cost savings over five years.
The acquisition is estimated to be modestly accretive to State Street's operating earnings in fiscal 2010.
-- Reported by Joseph Woelfel in New York.
Follow TheStreet.com on
and become a fan on