Merrill Expands Reach $5.3 Billion Deal Creates Mutual Fund Behemoth

Merrill Lynch & Co. is buying London’s top mutual fund company for $5.3 billion, boosting its growing international money management business with a wealth of European and Japanese institutional clients.

The deal Wednesday with Mercury Asset Management Group PLC will create one of the world’s biggest mutual fund managers with about $450 billion in client assets.

The combination gives Merrill another big asset outside its home market, and Mercury gains a powerful new partner with substantial experience dealing with small clients.

The acquisition is the latest in a series of consolidations taking place in the securities industry as competition forces firms to expand and seek new sources of revenue.

Merrill Lynch, like many of its competitors, has been moving to expand in the highly profitable asset management business and also capture a bigger chunk of the vast market in providing financial assistance to investors abroad.

“This acquisition represents a quantum leap toward our goal of becoming a global leader in the asset management business, one of the most attractive segments of the financial-services industry,” said Chairman David H. Komansky.