In the asset management industry, the corporate structures can get confusing -- and the numbers huge. BlackRock (NYSE:BLK), for example, is a large asset management firm with $314 billion under management. The firm, in turn, is majority owned by The PNC Financial Services Group, Inc. (NYSE:PNC).

Yesterday, BlackRock agreed to purchase another asset management firm, State Street Research & Management Co., which has $52 billion under management. This firm is owned by MetLife (NYSE:MET), which has $338 billion in assets.

The price tag for State Street Research comes to roughly $375 million in cash and stock. The firm serves institutional and mutual fund investors.

The asset management business is rapidly becoming a commodity, which means more pressure on fees. To stay competitive, companies such as BlackRock need to bulk up on assets by purchasing other companies.

In a way, the asset management industry is also facing Sarbanes-Oxley-type problems. In light of the crusade by New York Attorney General Eliot Spitzer, asset management firms need to put much more resources into compliance.

For MetLife, the deal makes a lot of sense. It can avoid the increased costs of compliance, and it was wise to establish an alliance with BlackRock. Moreover, MetLife will get up to 25% more in cash if certain milestones are achieved.

It's a smart model that should work, and chances are it will probably not be the last deal from BlackRock. Investors were also encouraged, as the deal is expected to be accretive to BlackRock's earnings in 2005.

Fool contributor Tom Taulli is the author of The EDGAR Online Guide to Decoding Financial Statements . He does not own shares in the companies mentioned in the article.