Power Financial Corp. subsidiary Great-West Lifeco Inc. today announced a $4.6 billion deal to acquire U.S.-based Putnam Investments Trust.

Winnipeg-based Great-West Lifeco said it reached an agreement with Marsh & McLennan Companies to acquire the asset management business of Putnam Investments Trust, while Great-West Life Assurance Co. will acquire Putnam’s 25% interest in T.H. Lee Partners.

Established in 1937, Putnam is one of the oldest and largest investment managers in the United States. Putnam had US$192 billion in assets under management as of Dec. 31.

“This transaction positions Lifeco as a leader in asset accumulation and wealth management in the United States,” Raymond McFeetors, Great-West Lifeco’s CEO, said in a news release.

“It provides a unique opportunity for us to assume a strategic position in the market space for mutual fund and institutional assets.”

Putnam CEO said the transaction “is very good for our clients, financial advisers, strategic partners and employees. We are very pleased to be associated with the Power Financial Corp. group of companies, who have a long track record in asset management businesses and have an excellent record of shareholder value creation.”

Great West said the deal involves a tax benefit of about $644 million.

With offices in Boston, London and Tokyo, Putnam’s about 3,000 employees manage US$118 billion in retail assets for U.S. mutual fund investors, US$39 billion for North American institutional accounts and US$35 billion worth of institutional and retail assets in Europe and Japan.

“The acquisition of Putnam’s asset management business allows Lifeco to achieve, with a single transaction, a major presence in the mutual fund and institutional asset management industry in the United States,” the company said.

“The acquisition also includes operations in Europe and Asia, and a world-class brand.”

Putnam will keep its name, existing management, investment, distribution and service teams, operating as a separate business unit of Great West, with its own board of directors.

Funding for the transaction will come from internal resources as well as from an issue of Great West Lifeco common shares of no more than $1.2 billion, the issuance of debentures and hybrids, bank credit and the acquisition tax benefit

Great West Lifeco said it expects the acquisition to add to earnings, before restructuring charges, in its first year. The transaction is expected to close in the second quarter, subject to regulatory approval and certain other conditions.