Fleet to Acquire Columbia Management

Fleet Financial Group Inc. said it agreed to buy money manager Columbia Management Co. for as much as $600 million in cash, as the bank moves to expand its money management business. The acquisition, which was expected, gives the Boston-based bank an additional $22 billion in assets to manage, including about $6 billion in no-load mutual funds. The purchase would roughly double Fleet’s mutual fund business from about $5 billion in assets under management, which makes it the ninth largest among U.S. banks. For Columbia, the sale culminates a decision it made last August to seek proposals from potential buyers. Fleet agreed to pay a $400-million premium for the company, plus an undisclosed amount to reward performance and incentives to retain management during the next six years. Closely held Columbia, based in Portland, Ore., is one of the biggest asset managers in the Pacific Northwest. Fleet said all top Columbia management is expected to remain. Columbia will operate as an independent company within Fleet. Fleet’s shares edged down 6 cents to close at $65.75 on the NYSE.