DBS said that the combined firm will manage more than $150bn and expected to be one of the largest asset management companies in the Asian region.

According to the DBS, the combined investment management platform will offer an increased scope of products and capabilities to better enable DBS and Nikko AM to strengthen their asset management proposition to meet the needs of Asia’s population, according to the DBS.

Under the terms of the agreement, Nikko AM will acquire DBSAM, for $104m, and DBS will acquire a 7.25% interest in Nikko AM, thus allowing DBS to participate in the future growth of the combined business.

As part of the transaction, DBS and Nikko AM will enter into a non-exclusive distribution agreement through which Nikko AM’s portfolio of investment products can be distributed through DBS’ network of core markets in the region.

Under the terms of the agreement, DBS will inject into Nikko AM its Singapore asset management subsidiary; 30% stake in HwangDBS Investment Management, Malaysia-based independent fund management firm; 51% stake in Asian Islamic Investment Management (the other 49% of which is owned by HwangDBS Investment Management); and its Hong Kong fund management subsidiary.

DBS added that Changsheng Fund Management, a Chinese affiliate 33% owned by DBSAM, will not be part of the transaction and will be held directly under DBS Group subject to regulatory approvals.

As part of the transaction, DBS will have representation on the boards of Nikko AM and Nikko AM’s Singapore subsidiary.

DBS CEO Piyush Gupta said that the tie-up with a partner like Nikko AM, that shares DBS’ deep commitment to Asia, will enable to build scale, while leveraging DBSAM’s investment and structuring capabilities.

"The combined platform will be an excellent source of product manufacturing, sales support and training, and with our expanding presence in Asia, it will also benefit from DBS’ extensive distribution network in the region," Gupta said.

DBSAM CEO of Deborah Ho said the growth momentum in Asia will generate significant business opportunities for DBSAM and Nikko AM.