Franklin Buys Legg Mason in an Effort to Survive Passive Era (2)

Franklin Resources Inc. and Legg Mason Inc. helped pioneer asset management in the 20th century. On Tuesday, the venerable but fading names said they will combine in an effort to compete, as low-cost index funds upend their industry.

In an era when traditional stock-pickers are under intensifying pressure, San Mateo, California-based Franklin agreed to buy Legg Mason to create a firm with a combined $1.5 trillion in assets.

Bloomberg’s Sonali Basak reports on why Franklin Resources and Legg Mason are becoming one company.

(Source: Bloomberg)

The deal, valued at nearly $4.5 billion, shows how much the fund industry has transformed since the two companies were founded -- Franklin started in 1947 and Legg Mason’s precursor firm ...