State Street cancels $3.5bn acquisition of Brown Brothers arm

State Street Corporation has cancelled its planned $3.5bn acquisition of the investor services business of Brown Brothers Harriman & Co.

State Street attributed the decision to regulatory problems, stating that the regulatory path forward would involve further delays and not all necessary approvals have been resolved.

The transaction structure had become "increasingly complex" and "presented additional operational risk to State Street", the firm said.

The deal, which was announced in September last year, would have seen the acquisition of BBH's custody, accounting, fund administration, global markets and technology services operations.

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State Street said that the termination of the deal will not cause a contractual penalty by either State Street or BBH.

Ron O'Hanley, chair and CEO of State Street, said that the cancellation was "in no way a reflection of the quality of the BBH franchise".

"Our overall strategy is strong and differentiated, and we remain confident in the organic growth trajectory of our business," he added.