Unlock the Editor’s Digest without cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
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 accordance with folks acquainted with the state of affairs.
The 2 sides had been in on-and-off discussions for greater than a 12 months, and have been in unique talks to kind a European big with nearly €2.8tn of belongings underneath administration as lately as Saturday morning. A number of the folks mentioned the talks might 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 accordance with folks 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 way of 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 belongings and a €13.75bn market capitalisation.
Assuming a valuation of at the least €6bn, Allianz International Traders would have been value about half as a lot as Amundi whereas having roughly 1 / 4 of its belongings.
However the German group’s father or mother insurer was solely prepared to just accept a transaction which might have given it a co-leadership position, among the folks mentioned.
Allianz declined to touch upon specifics however informed the FT that asset administration was “strategically integral” to the group and mentioned that Allianz International Traders was “performing effectively”.
It confused that it will “solely take into account inorganic progress alternatives that improve these strengths and enhance our publicity to asset administration.”
A spokesperson for Amundi informed the FT on Saturday afternoon: “Amundi shouldn’t be 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 accordance with one individual acquainted with its place.
Others mentioned that whereas Amundi noticed a possible transaction as an “acquisition” of Allianz International Traders, the Germans wished a partnership that will assist enhance its revenue from asset administration.
Some folks 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 grow to be Amundi’s second-largest shareholder with a stake of round 30 per cent, and a roughly 20 per cent free float, folks acquainted with the state of affairs mentioned.
However the Germans pushed again on this construction as they wished a extra balanced cut up, the folks added.
Extra lately, the 2 sides appeared to have come nearer to an settlement. An individual acquainted with the matter mentioned that Crédit Agricole appeared ready to dilute its holding under 50 per cent to be able to permit Allianz to have a bigger stake in Amundi as a part of a mixture.
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 good thing about synergies between the 2 companies.
Amundi is among the business’s most worthwhile gamers, and is seen as having excelled at placing tie-ups with retail banks to distribute its merchandise.
Funding managers are pursuing scale, progress markets and new purchasers as margins are squeezed by increased prices, decrease charges and the march of enormous American corporations 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, placing strategic partnerships or quitting the enterprise.
Earlier this 12 months, Amundi held talks to purchase Axa Funding Managers from its father or mother insurer however was not capable of agree phrases, in accordance with two folks 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 be in talks with Italy’s Generali a couple of potential tie-up, the FT reported final month.
Allianz has prior to now held discussions with Germany’s DWS a couple of potential asset administration tie-up, however these are now not stay, in accordance with folks near DWS.
