BlackRock details Merrill agreements

BOSTON (Reuters) - U.S. asset manager BlackRock (BLK.N: Quote, Profile, Research) gave details on Tuesday of the revised agreements it has struck with top shareholder Merrill Lynch & Co (MER.N: Quote, Profile, Research) that, among other things, try to protect BlackRock's interests if Merrill's structure changes substantially.

Merrill is BlackRock's biggest shareholder and decided last week to retain its 49.8 percent stake in the biggest publicly traded U.S. asset manager after weighing whether to sell it in full or part to raise capital.

In a filing with the U.S. Securities & Exchange Commission, BlackRock said the revised Stockholder agreement has expanded the definition of change of control at Merrill Lynch to include the disposition of two-thirds or more of Merrill's global private client business.

This business is critical to the relationship between the two firms as Merrill distributes BlackRock's funds through the global private client business. If Merrill sells this business or a substantial portion of it, then change of control rules will be triggered.

If a change of control does take place at Merrill, a global distribution agreement between the two firms will be extended for five years from the date such change occurs, according to the filing.

Merrill obtained the BlackRock stake in 2006 in exchange for its fund unit, which it sold to BlackRock in a $9.5 billion (4.8 billion pounds) deal, the biggest purchase yet in the U.S. fund industry.

The revised agreement also makes it easier for Merrill to start or buy hedge funds and other alternative investments.

In 2007, BlackRock bought the fund of funds business of Quellos Group LLC for $1.7 billion, marking its presence in the hedge funds business.

BlackRock also extended its distribution agreement -- under which Merrill sells BlackRock's products globally -- till July 16, 2013. The agreement was originally set to expire in 2009.