Mellon Bank to Buy Most of Top British Fund Manager

Mellon Bank Corp. said Friday it agreed to buy most of Newton Investment Management, a leading British fund manager, for $280 million, the latest move by a bank or brokerage to buy a European money manager.

Mellon, which owns the Dreyfus investment management business, would buy 75% of Newton under the deal, and Newton’s management and staff would own the remaining 25%.

In addition to Newton’s $20.5 billion in assets under management, Pittsburgh-based Mellon will acquire a foothold in the growing European equities business and a strong team of fund managers and analysts, industry analysts said.

Mellon has $355 billion under management in its 11 investment management units.

The acquisition is the largest in the asset management field by Mellon, which is seeking to grow outside the United States to compete with other banks and securities firms that are merging to form global powerhouses. Mellon has established its presence in Japan, Hong Kong, Brazil and Chile.

It also recently acquired Founders Asset Management Inc., a Denver-based manager of stock mutual funds and other investment vehicles.

The deal, which should be completed later this year, comes two months after Mellon rejected a $22.4-billion takeover offer from Bank of New York Co. that would have created the 10th-biggest bank in the United States.

Royal Bank of Scotland owns a third of Newton, which it has agreed to sell to Mellon Bank for $92 million.

Mellon stock was unchanged at $68.81 in New York Stock Exchange trading.