ARX is based in Rio de Janeiro and boasts more than $2.6 billion in assets.
Although the exact terms have not been published, the deal is certain to add value to shares in the Bank of New York Mellon and will signal an expansion into a lucrative market where assets under management have displayed an impressive 27 per cent increase over the past five years.
The deal, which will be finalised in the first quarter of 2008 will see ARX Capital integrated into the Bank's Mellon Asset Management unit in Brazil, which currently manages $26 billion in assets.
Boosted by this news, which was speculated in July, shares in the Bank of New York Mellon rose by $1.12 to $47.29 on the New York Stock Exchange.
The Bank has already seen a 13 per cent increase this year in the Supercomposite Asset Management and Custody Banks Index.
Custody assets of the Bank of New York now total over $20 trillion and mean that the Bank has leapfrogged JPMorgan Chase as the biggest custody bank.