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Allianz has paused talks with Amundi and its majority shareholder Crédit Agricole over plans to mix its €560bn funding administration arm with its bigger French rival, in line with individuals acquainted with the state of affairs.
The 2 sides had been in on-and-off discussions for greater than a yr, and had been in unique talks to kind a European large with virtually €2.8tn of property beneath administration as just lately as Saturday morning. A number of the individuals stated the talks may resume at a later date.
The hiatus illustrates the problem of pulling off large-scale mergers and acquisitions in asset administration and comes as a wave of consolidation is sweeping throughout the business, with current offers together with BNP Paribas’s €5bn acquisition of Axa Funding Managers to create a €1.5tn European champion.
A key sticking level between Allianz and Crédit Agricole has been the construction of any tie-up, in line with individuals acquainted with the state of affairs. They’ve struggled to agree on who would have management of an enlarged entity.
Amundi, which was created in 2010 by the merger of the asset administration arms of French banks Crédit Agricole and Société Générale, has grown into Europe’s largest asset supervisor, with €2.2tn in property and a €13.75bn market capitalisation.
Assuming a valuation of not less than €6bn, Allianz World Traders would have been value about half as a lot as Amundi whereas having roughly 1 / 4 of its property.
However the German group’s mother or father insurer was solely keen to simply accept a transaction which might have given it a co-leadership position, a number of the individuals stated.
Allianz declined to touch upon specifics however advised the FT that asset administration was “strategically integral” to the group and stated that Allianz World Traders was “performing effectively”.
It careworn that it might “solely think about inorganic development alternatives that improve these strengths and improve our publicity to asset administration.”
A spokesperson for Amundi advised the FT on Saturday afternoon: “Amundi isn’t in discussions with Allianz.” The French group declined to remark additional.
Crédit Agricole is Amundi’s largest shareholder, with a 69 per cent holding. The asset supervisor has a 29 per cent free float. Crédit Agricole didn’t instantly reply to a request for remark.
For Allianz, a precondition for any profitable tie-up would have been “a shared understanding of partnership at a technical and cultural stage”, in line with one particular person acquainted with its place.
Others stated that whereas Amundi noticed a possible transaction as an “acquisition” of Allianz World Traders, the Germans needed a partnership that will assist improve its revenue from asset administration.
Some individuals in Amundi’s camp had envisaged a set-up the place Crédit Agricole would stay the controlling shareholder of the enlarged asset supervisor with a stake simply above 50 per cent. Allianz would then develop into Amundi’s second-largest shareholder with a stake of round 30 per cent, and a roughly 20 per cent free float, individuals acquainted with the state of affairs stated.
However the Germans pushed again on this construction as they needed a extra balanced cut up, the individuals added.
Extra just lately, the 2 sides appeared to have come nearer to an settlement. An individual acquainted with the matter stated that Crédit Agricole appeared ready to dilute its holding beneath 50 per cent with a purpose to enable Allianz to have a bigger stake in Amundi as a part of a mix.
Inside Allianz, some opposition to an Amundi tie-up has mirrored issues about dropping each strategic flexibility and management of its asset administration enterprise, whereas permitting the French aspect to get the advantage of synergies between the 2 companies.
Amundi is among the business’s most worthwhile gamers, and is seen as having excelled at putting tie-ups with retail banks to distribute its merchandise.
Funding managers are pursuing scale, development markets and new shoppers as margins are squeezed by greater prices, decrease charges and the march of huge American companies into the European market.
In the meantime banks and insurers are weighing up their dedication to their funding administration divisions and evaluating the deserves of doubling down, putting strategic partnerships or quitting the enterprise.
Earlier this yr, Amundi held talks to purchase Axa Funding Managers from its mother or father insurer however was not in a position to agree phrases, in line with two individuals acquainted with the state of affairs. In August, Axa introduced a €5bn deal to dump the enterprise to banking group BNP Paribas after concluding that it was subscale.
France’s Natixis, which is majority owned by Groupe BPCE, can also be in talks with Italy’s Generali a few potential tie-up, the FT reported final month.
Allianz has up to now held discussions with Germany’s DWS a few potential asset administration tie-up, however these are now not dwell, in line with individuals near DWS.
