The deal will take Invesco’s total assets under management to more than $1.2 trillion.

Investment firm Invesco will acquire MassMutual's asset management affiliate OppenheimerFunds and take Invesco’s total assets under management to more than $1.2 trillion.

In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a mix of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with a stake of about 15.5 per cent, they said in a statement.

Invesco's acquisition involves a consideration to MassMutual and OppenheimerFunds employee shareholders consisting of 81.9 million shares of Invesco common equity and $4 billion in perpetual, non-cumulative preferred shares with a 21-year non-call period and a fixed rate of 5.9 per cent. The 81.9 million shares include around 6.6 million shares to be issued as a part of the post-closing conversion of unvested restricted stock awards, which are held by OppenheimerFunds employee shareholders, into Invesco restricted stock awards.

Invesco and MassMutual will enter into a shareholder agreement, in which MassMutual obtains customary minority shareholder rights, including representation on Invesco’s board of directors. 

MassMutual will nominate William Glavin Jr, current independent board member of OppenheimerFunds and its retired chief executive. The shareholder agreement specifies a lock-up period of two years for the common stock.

The transaction is expected to raise Invesco’s earnings per share with 18 per cent accretion for the three quarters in 2019 and 27 per cent accretion in 2020. 

Additionally, as part of an ongoing partnership between Invesco and MassMutual, the companies will explore future strategic collaboration opportunities. 

“The combination with OppenheimerFunds and the strategic partnership with MassMutual will meaningfully enhance our ability to meet client needs, accelerate growth and strengthen our business over the long term,” said Martin Flanagan, president and chief executive of Invesco. “This is a compelling, highly strategic and accretive transaction for Invesco that will help us achieve a number of objectives: enhance our leadership in the US and global markets, deliver the outcomes clients seek, broaden our relevance among top clients, deliver strong financial results and continue attracting the best talent in the industry. We have long held OppenheimerFunds’ people and strong investment performance track record in high regard. OppenheimerFunds’ culture and commitment to high-conviction investing complements our own, and the combination will create significant opportunities for the talented professionals of both companies.”

The transaction is expected to close in the second quarter of 2019, pending necessary regulatory and other third-party approvals.