State Street Corporation has announced that it is to acquire Intesa Sanpaolo's Securities Services (ISPSS) business in Italy and Luxembourg.

It is hoped that the transaction, which is expected to be accretive to State Street's 2010 earnings per share, will bolster the firm's position in Europe's growing pension market.

The acquisition includes a long-term servicing agreement with Intesa Sanpaolo.

The transaction amounts to around €1.28bn in cash at closing, and State Street expects to support the acquired ISPSS balance sheet with approximately €560million of additional capital at the closing.

ISPSS provider securities services in the Italian market, and has a significant presence in the Luxembourg market. The global custody, depository banking, correspondent banking and fund administration portions of the ISPSS business have been acquired by State Street, and the agreement also includes a long-term investment servicing arrangement with ISP to service all of its investment management affiliates, including Eurizon Capital. Eurizon Capital is the largest fund manager in Italy with around €135bn in assets under management at 30 September 2009.

Ronald E. Logue, chairman and CEO of State Street, commented: "Today's acquisition represents a significant milestone in State Street's strategy to become a truly global provider. With the addition of Intesa Sanpaolo's securities services business, we will enhance our ability to provide high-value services to institutional investors around the world and generate long-term value for our shareholders and our employees."

It is expected that the transaction will be financed through available capital, and the closing is anticipated for the second quarter of 2010, subject to regulatory approvals and satisfaction of other closing conditions.

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