NEW YORK (TheStreet) -- State Street Corp. (STT) - Get Report shares are popping 2.6% to $59.66 on Wednesday after the financial services holding company earlier today announced that it would buy General Electric Co.'s (GE) asset management business for up to $485 million.
The transaction of GE Asset Management is expected to add around $100 billion in assets overseen for institutional clients such as foundations, endowments, retirement plan sponsors and sovereign wealth funds and insurers.
"We believe this will help accelerate our strategic plan to extend our capabilities in key areas for our clients," State Street CEO Jay Hooley stated.
Particularly, this purchase will allow State Street to grow in the business of managing money for insurers. For GE, the agreement to sell its investment management arm comes as it works to exit its financial assets to focus more on its core industrial units.
The deal is expected to be finalized early in the third quarter of 2016.
Separately, TheStreet Ratings currently has a "Hold" rating on the stock with a letter grade of C+.
The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and a generally disappointing performance in the stock itself.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: STT