BNP Paribas is in exclusive talks with French insurer AXA to buy 100% of its AXA Investment Managers arm at an agreed price of 5.1 billion euros ($5.50 billion), the euro zone’s biggest bank said on Thursday.
For BNP, such an acquisition would significantly boost its asset management arm as the industry is in a race for size to achieve economies of scale and lower costs.
This represents a major strategic move for AXA, Europe’s second-biggest insurer, as it aims to focus on its core businesses – life insurance, savings, property and casualty policies as well as health insurance.
The would-be combined entity would have total assets under management of about 1.5 trillion euros, BNP said in a statement, and it would become one of the top European asset managers after leader Amundi, which had 2.16 trillion euros of assets under management at the end of June.
BNP said it expected the transaction to close in mid-2025. The bank said the acquisition will have an impact of about 25 basis points on its CET1 ratio — a key measure of financial strength.
AXA said in a separate statement that BNP would pay 5.1 billion euros in cash.
AXA said it would receive 300 million euros in addition for the acquisition by AXA IM of Select, a company owned by AXA that offers investment solutions, such as management of funds.
The French insurer said it would use 3.8 billion euros’ worth of proceeds from these sales in share buybacks. The rest of the proceeds will be spent on “organic and inorganic growth”, AXA Deputy CEO Frederic de Courtois said in a call with reporters.
The transaction also includes a 15-year agreement under which BNP would provide investment management services to AXA.
($1 = 0.9276 euros) (Reporting by Mathieu Rosemain; Editing by Sudip Kar-Gupta and Susan Fenton)