Chennai, Nov 19 (IANS): Sundaram Asset Management Company Limited (Sundaram AMC) on Friday said it has received the regulatory approval to acquire the asset management business of Principal Asset Management Pvt Ltd (Principal India).

Sundaram AMC is a 100 per cent subsidiary of non-banking finance major Sundaram Finance Ltd.

Sundaram AMC will acquire the schemes managed by Principal India and acquire 100 per cent of the share capital of Principal Asset Management Pvt. Ltd., Principal Trustee Company Pvt. Limited, and Principal Retirement Advisors Pvt. Ltd., as originally announced on the January 28, 2021.

"This acquisition is a natural step in our aspiration to become a sizeable player in the asset management industry. The combined business of both the entities will achieve an aspirational landmark of Rs 50,000 crore. We will be able to leverage the combined platform to derive significant synergies," Harsha Viji, Executive Vice Chairman, Sundaram Finance said.

The Competition Commission of India (CCI) and the Securities and Exchange Board of India (SEBI) have given their final nod for the acquisition, it said.

The transaction is subject to compliance with SEBI prescribed processes and fulfillment of mutually agreed conditions precedent to deal closure.

As per regulatory requirements, there will be an 'exit load free window' for investors to redeem their investments, where such exit load is applicable.

Post deal closure, the schemes currently managed by Principal India and Sundaram will either be merged or renamed as Sundaram schemes in their respective categories.

All investors and distributors of Principal India schemes will become investors/distributors of Sundaram.

"We look forward to complementing our existing Equities fund management talent with the addition of the team from Principal India. We endeavour to retain and absorb Principal India's distribution franchise with minimal disruption to their commercial terms. The existence of the same back-office service provider (RTA) is expected to smoothen the transition for existing customers and distributors," Sunil Subramaniam, Managing Director, Sundaram AMC said.