BofA sells some asset management ops to Ameriprise

NEW YORK -- Bank of America Corp. said Wednesday it is selling the long-term asset management business of one of its units to Ameriprise Financial Inc.

Ameriprise, a financial planning services firm based in Minneapolis, will pay between $900 million and $1.2 billion in cash for Columbia Management's long-term asset management business. The division has $165 billion in equity and fixed-income assets under management. The final price will be based on asset flows and investor consents leading up to the closing of the deal.

Charlotte, N.C.-based Bank of America has been among the banks hardest hit by the recession and mounting loan losses. The bank has received $45 billion in government bailout money over the past year. It was also required by the government in May to raise an additional $33.9 billion to help protect against potential future losses should the economy struggle to recover.

At that time, analysts predicted Bank of America could shed Columbia Management as part of its capital-raising efforts. However, the bank ended up raising the necessary money through other asset sales, stock offers and debt conversions.

Bank of America said it is still considering what to do with the cash investments and short-term asset management businesses currently managed by Columbia.

Ameriprise said the acquisition will boost earnings within one year, excluding integration costs. The financial firm said the acquisition will generate between $130 million and $150 million in annual cost savings, with about half of the savings being realized in the first year after the purchase is completed.

Combined with its current operations, Ameriprise will manage about $400 billion in assets after the deal is completed.

The deal is expected to close in the spring of 2010.

Shares of Bank of America rose 11 cents to $17.27 in premarket trading, while Amerprise shares rose $1.01 to $33.35.