The board of directors at Barclays has formally accepted an offer from US-based Blackrock to acquire Barclays Global Investors, the UK-listed bank's investment management arm which includes the exchange traded funds business iShares.

Barclays' board told the US investment manager it will recommend the transaction to its shareholders for approval at a special meeting in early August 2009. The transaction is expected to close in the fourth quarter 2009 following approval by Barclays’ shareholders, the receipt of client consents and regulatory approvals, and satisfaction of customary closing conditions.

The deal, which creates the world's biggest asset management firm by size of assets, comes as banks have been spinning off assets to replenish capital after the financial crisis.

On 31 March 2009, BlackRock had assets under management totalling $1.283 trillion. The firm manages assets on behalf of institutions and individuals worldwide through a variety of equity, fixed income, cash management and alternative investment products.

In addition, a growing number of institutional investors use BlackRock Solutions for investment system, risk management and financial advisory services. Headquartered in New York City, BlackRock has employees in 21 countries and a presence in the US, Europe, Asia, Australia and the Middle East.