Street View: BNP Paribas' planned acquisition of AXA IM makes 'strategic sense'
** BNP Paribas BNPP.PA is in talks with AXA AXAF.PA to buy 100% of its Investment Managers (IM) arm for 5.1 bln euros ($5.51 bln), the companies said on Thursday
** BNP shares fall 1.2% on Friday amid a wider sell-off in European banks; AXA rises 2.4%, also boosted by H1 results
A 'WIN-WIN' DEAL
** RBC says the deal makes strategic sense, while Jefferies notes BNP still has about 50 bps of excess capital and needs to go big in asset-gathering businesses to compete with peers
** The agreement will come with close to 860 bln euros of assets under management and a long-term partnership to manage a significant part of AXA's assets, making it a "win-win" deal, Deutsche Bank says
** It will help BNP close the gap with Amundi AMUN.PA and pass Natixis IM to become the second-largest asset manager in Europe, Jefferies says
** It adds the deal values AXA IM at 15x P/E, a premium to the wider group
** J.P.Morgan highlights AXA's commitment to a 3.8 bln euro share buyback once the deal closes, "rather than spending the bulk of the proceeds on M&A"
** However, Barclays has a "mixed view" on the transaction; it says that while BNP's CET1 ratio would get closer to its 12% target, the deal will provide limited EPS accretion of around 2-3%
** It adds the P/E ratio for BNP would be higher than the one at which traditional asset managers trade
($1 = 0.9257 euros)
Reporting by Stéphanie Hamel
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