Germany’s HypoVereinsbank has agreed in principle to sell its 90% share in fund manager Foreign & Colonial to financial services provider Eureko for £414m (e662m), valuing F&C at £460m or 5.9 times forecast revenues for 2000.

Following the sale EGAM, Eureko’s asset management operation, will combine with F&C under the latter’s brand name, taking combined assets under management to e120bn.

Eureko has stated its desire to build a pan-European asset management business and it believes the acquisition of F&C will help achieve this goal.

At present F&C concentrates on the UK institutional and investment trusts market and the German retail market.

Eureko comprises the Netherlands’s second largest insurer Achmea, Friends First in Ireland and Seguros & Pensoes, Portugal’s biggest life and non-life insurer. EGAM is the largest asset manager in the Dutch and Portuguese pensions market and the fifth largest in Ireland.

Joao Talone, chief executive of Eureko says: “This acquisition affirms the commitment of the group to the asset management business and positions the future, enlarged F&C as a leading pan-European asset management company. It is yet another major step forward in the realisation of Eureko’s pan-European vision.”

Robert Jenkins, chief executive of F&C is to head the enlarged group which will be headquartered in London. “This transaction preserves a long standing and key relationship with HypoVereinsbank whilst enlarging our asset base and distribution on the continent via Eureko. Europe is the asset management growth story of the decade and the combination of HypoVereinsbank custom and Eureko’s ownership places F&C at the centre of a rapidly expanding market place,” he says.

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