In a transaction potentially worth $6.1 billion, Barclays (NYSE:BCS) will sell its 19.6% stake in BlackRock (NYSE:BLK).
Barclays will offer 35.2 million shares of BlackRock at a price to be determined within a few days, Reuters said. Book-runners for the offering will be Barclays Capital, Morgan Stanley (NYSE:MS) and Bank of America Merrill Lynch (NYSE:BAC).
BlackRock will also repurchase as much as $1 billion of the shares.
Basel III regulations covering bank reserve levels require banks to backup minority stakes in asset managers with additional cash. That reduces the financial advantage of holding stakes in such outside firms.
Analysts cited by Reuters said the new restrictions were forcing banks into “deleveraging or pursuing transactions like this” to boost their capital ratios, and they predicted there could be more such transactions as banks seek to bolster their available capital.
Barclays’ shares were up more than 2% in early Monday trading, while BlackRock’s fell more than 1%.
The UK bank acquired the almost 20% share of the U.S.-based asset manager three years ago when BlackRock completed a $13.5 billion merger with Barclays Global Investors, making BlackRock the largest asset manager in the world. BlackRock also received a 7.1% stake in Barclays.