US-based T Rowe Price has decided to acquire a 26 per cent stake in UTI Asset Management Company (AMC) for around Rs 650 crore.

The sale follows an earlier attempt by UTI AMC which remained unsuccessful last year due to low valuations. The latest deal values the fund house at around Rs 2600 crore.

Under the proposed deal, UTI MF's four stake holders, which include SBI, LIC, Bank of Baroda and Punjab National Bank, would sell 6.25 per cent each to T Rowe Price.

UTI MF clocked a net profit of Rs 147 crore for the year ended March 31, 2008, the highest among all local fund houses in absolute terms. Following the deal, the UTI MF board will be reconstituted.

It should be noted that UTI is the country's fourth-largest fund house with AAUM of Rs 73,925 crore at the end of August.

Apart from bolstering the fund house's operations, T Rowe Price would also invest in UTI Venture and other private equity funds being set up by the institution.

T. Rowe Price Group, Inc. is a publicly owned holding investment manager. The firm provides its services to corporations, corporate, public, and Taft-Hartley retirement plans, foundations, and endowments. The total assets managed by the T Rowe Price group of companies world-wide stood at $269 billion as on March 31, 2009.