BNP in Talks to Buy Axa Asset Managers for $5.5B
A special attraction for BNP was Axa’s pool of alternative assets, a fast-growing and lucrative part of asset management.
BNP Paribas SA is in exclusive talks with Axa SA to buy the insurer’s asset management unit for €5.1 billion ($5.5 billion), a move that will create one of Europe’s largest money managers.
The Paris-based bank will acquire 100% of Axa Investment Managers under the deal, which is expected to be signed by the end of the year after consultation with the employees’ representatives, the lender said in a statement Thursday.
The combined entity will have about €1.5 trillion of assets under management, based on figures for the end of 2023.
The two firms will also enter into a 15-year strategic partnership under which BNP Paribas will provide investment management services to Axa. Bloomberg News reported on talks between the two firms for a potential tie-up of their asset management units last month.
The purchase is the biggest deal yet for BNP Chief Executive Officer Jean-Laurent Bonnafe, who has been returning excess cash to shareholders from the $16.3 billion sale of US lender Bank of the West, which closed last year.
A rare example of an insurer and bank combining their asset managers, the transaction announced Thursday creates a top player in Europe by assets under management, although it will still be dwarfed by the likes of BlackRock Inc.
The combination “would drive our growth over the long-term,” Bonnafe said in the statement.
Investment firms across the globe are looking to consolidate, with many seen as too small in a business where scale is key to compete. In Europe, France’s Amundi SA — Europe’s largest asset manager with €2.2 trillion under management — has been buying rivals to increase scale.
In 2021, Goldman Sachs Group Inc. agreed to buy the asset-management arm of Dutch insurer NN Group NV.
Consolidation in “the hyper-competitive asset management sector” is accelerating, Axa Deputy CEO Frederic de Courtois said on a call with reporters Thursday. That requires AXA’s investment unit to “scale up in order to remain competitive.”
A particular attraction for BNP Paribas was Axa’s pool of alternative assets, a fast-growing and still lucrative part of asset management. Alternative assets are expected to reach nearly $40 trillion by the end of the decade with firms like BlackRock pushing into the business.
Axa said in a separate statement that it would carry out a share buyback of €3.8 billion immediately following the closing of the proposed transaction, which is expected in mid-2025. The insurer will exit the asset management business with the deal.
(Credit: Adobe Stock)
Copyright 2024 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.