BNP Paribas swoop on AXA fund business fuels hopes for more deals
Repeats story published on Aug. 2 with no change to text.
By Mathieu Rosemain, Andres Gonzalez and Iain Withers
PARIS/LONDON, Aug 2 (Reuters) -BNP Paribas' BNPP.PA talks to buy the investment business of insurer AXA AXAF.PA will trigger more deals, bankers say, as European money managers seek to fend off U.S. rivals and as customers demand cheap technology-driven investing.
The French bank revealed on Thursday it was in exclusive negotiations to buy AXA Investment Managers for more than 5 billion euros ($5.5 billion), creating one of Europe's biggest fund groups with around 1.5 trillion euros of assets.
The deal came after a weeks-long bidding battle between BNP and rivals, including the region's biggest asset manager Amundi AMUN.PA and U.S. players, said three people with direct knowledge of the deal.
Europe's fund managers are under pressure to bulk up to respond to larger U.S. rivals like BlackRock BLK.N, Vanguard and the fund businesses of Wall Street banks, such as JPMorgan JPM.N and Goldman Sachs GS.N, many of which want to expand in Europe.
The big U.S. funds have an edge in a sector that was once centered around highly-paid star managers but which has shifted to become cost-savvy by investing across a standard range of stocks, bonds and other securities.
Compounding this challenge, European funds have recently found it tough to maintain returns in volatile markets, while high price inflation in the region also drove up their costs.
"I suspect this will be the first of many deals," said Joe Dickerson, an analyst at Jefferies. "This is probably going to prompt others ... to act because this creates a major force in European asset management."
The mantra for asset managers is "go big or go home", one of the sources said, adding that most fund firms - particularly under-pressure mid-sized outfits - were "basically for sale".
BIDDING RACE
Bidding for the business was hotly contested, the three people with knowledge of the deal told Reuters.
Rival asset managers, including Credit Agricole-owned Amundi and U.S. buyers, were jockeying to clinch the deal, those people said.
Amundi declined to comment. BNP Paribas and AXA both declined to comment.
Jefferies' Dickerson predicted that other European banks would follow BNP in expanding in fund management, searching for ways to drum up fees.
The gradual reductions in interest rates also promises further potential for mainstream fund managers such as AXA, if they can win back some of the trillions of dollars parked in money market funds, a form of investment that tracks central bank rates.
After a slow build-up, talks accelerated over the past few weeks, culminating in conversations between BNP and AXA - led by BNP CEO Jean-Laurent Bonnafé and AXA CEO Thomas Buberl - that finalised the deal, said one of the people.
Bonnafe and Buberl also talked several times to discuss the terms, another of the sources involved said, adding that AXA had been looking at options for its asset management arm for several months.
Amundi was one of a small shortlist of companies competing for the deal, the three sources said.
The threat of AXA IM being snapped up by BNP's rival Amundi is likely to have resulted in the high price paid, one of the people said. The sources spoke on condition of anonymity because the talks were private.
The total estimated transaction value is expected to be 5.4 billion euros, representing a multiple of 15 times 2023 earnings, Axa said.
"While this values AXA IM at ... a premium compared to peers like Amundi and Schroders - strategically, the deal makes sense," said Johann Scholtz, senior equity analyst at Morningstar.
The takeover is BNP's third largest deal ever, and would be the tenth biggest unveiled so far in Europe this year across all sectors, based on LSEG data, as M&A activity hots up after a lackluster 2023.
It is also one of the largest deals in asset management in the past few years. Goldman Sachs acquired Netherlands-based asset manager NN Investment Partners for 1.7 billion euros in 2022 but there have been few big deals since.
AXA was advised by JPMorgan and Zaoui & Co, while BNP had its own internal advisory team, two of the people said.
(1 euro = $1.0818)
BREAKINGVIEWS-BNP’s AXA deal is a logical use of spare cash ID:nL8N3JO2YA
BNP leaps into leading pack of European fund firms (Copy) https://reut.rs/3WpzQZM
Reporting by Mathieu Rosemain, Andres Gonzalez and Iain Withers. Editing by John O'Donnell, Anousha Sakoui and Jane Merriman
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
