BNP Paribas is engaged in exclusive negotiations with French insurer AXA to acquire 100% of its subsidiary AXA Investment Managers for a negotiated price of 5.1 billion euros ($5.50 billion), according to the largest bank in the euro zone, announced on Thursday.
For BNP, this acquisition would significantly enhance its asset management division, as the industry is currently striving to increase size to achieve economies of scale and reduce costs. This move is strategically significant for AXA, the second-largest insurer in Europe, as it intends to concentrate on its core business areas - life insurance, savings, property and casualty policies, and health insurance.
The combined entity would manage total assets of approximately 1.5 trillion euros, BNP stated in a press release, positioning it as one of the leading European asset managers, following Amundi, which managed assets of 2.16 trillion euros as of the end of June. BNP anticipates the deal to finalize in mid-2025. The bank noted that the acquisition would affect its CET1 ratio, a crucial indicator of financial robustness, by about 25 basis points.
In a separate announcement, AXA confirmed that BNP would pay 5.1 billion euros in cash. AXA also mentioned it would receive an additional 300 million euros for the acquisition of Select, a company owned by AXA that provides investment solutions, such as fund management. The French insurer plans to utilize 3.8 billion euros from these proceeds for share buybacks, with the remainder to be allocated for "organic and inorganic growth", according to AXA Deputy CEO Frederic de Courtois in a conversation with journalists.
The transaction includes a 15-year agreement where BNP would offer investment management services to AXA.
