Stock, market, and fund information for August 2021

Stock, market, and fund information for August 2021 - our site's details

Goldman Sachs, the renowned American multinational investment bank, announced on August 19, 2021, its intention to acquire NN Investment Partners, the investment arm of NN Group, for approximately €1.6 billion. This acquisition marks a significant step in Goldman Sachs' European business expansion.

Despite the usual initial stock price drop that occurs when a company buys another, the announcement of this deal resulted in only a brief dip in the stock prices of both companies. The dip was more due to an overall market downturn that day rather than the acquisition itself.

Goldman Sachs' price-to-earnings ratio (P/E) for this year stands at 7.6, and its price-to-book ratio (P/B) is 1.1. On the other hand, NN Group's P/E ratio is 8.6, and its P/B ratio is a more modest 0.3. These figures suggest that both companies' stocks are currently trading at bargain levels, at least by classic value criteria.

Contrary to expectations, Goldman Sachs does not plan to dismantle or absorb NN Investment Partners. Instead, the acquired business is expected to generate profits quickly with minimal restructuring. Goldman Sachs intends to keep NN Investment Partners as a fully functioning business, including its distribution capabilities, and make it a key pillar of its European business.

The news of this acquisition might be welcome for NN Group's shareholders, as it allows the company to focus on its core business of insurance. NN Group's hefty dividend yield of 5.5% could be an attractive proposition for investors seeking income.

Goldman Sachs will manage around $190 billion (around €162 billion) in assets for NN Group, which will undoubtedly strengthen Goldman Sachs' position in the European market. The acquisition is expected to have minimal impact on the overall market due to the brief dip in the stock prices of both companies.

This acquisition is a notable exception to the usual trends in the industry and is a testament to the strategic vision of both Goldman Sachs and NN Group. As the deal progresses, it will be interesting to see how this acquisition shapes the European investment landscape.