State Street is ending its bid to acquire Brown Brothers Harriman Investor Services, more than a month after it said the deal was in jeopardy. Brown Brothers said it has no plans to find a new acquirer.
Gaining regulatory approval would have required further delays and produced unfavorable alterations to the transaction, making going forward with the deal less appealing, State Street said in a statement Wednesday. Proposed changes to the deal would have increased State Street's operational risk and limited the anticipated benefits, the bank said.
"It is not in the best interest of clients, shareholders or employees to continue to invest time and resources in the transaction," State Street said.
The transaction,
"It is disappointing that State Street's inability to secure regulatory approval precluded the compelling vision that they brought to us," Bill Tyree, managing partner at Brown Brothers, said in a statement.
In October, the banks
The acquisition had been expected to expand State Street's reach in key markets, including Japan, and provide it with
Neither institution will pay a penalty for terminating the deal. The original terms included the stipulation that either party could choose to walk away at no cost.
Boston-based State Street is one of eight U.S. financial institutions categorized by regulators as global systemically important banks, or GSIBs. Institutions with this label are required to set aside larger capital buffers in case of failure, and their proposed deals likely receive additional scrutiny from regulators.
State Street had close to $35.7 trillion worth of assets under custody at the end of the third quarter.