The BNP Paribas Group has entered into “exclusive negotiations” to acquire 100% of AXA Investment Managers (AXA IM) with its €850bn assets under management, alongside an agreement for a long-term partnership to manage a large part of AXA’s assets.
In a statement on 1 August, the French headquartered group said BNP Paribas Cardif, the insurance business of BNP Paribas, after having directly proceeded to the proposed transaction as principal, would have the opportunity to rely on this platform for the management of up to €160bn of its savings and insurance assets.
With the combined contribution of BNP Paribas’ asset management platforms, the newly formed business would total €1,500bn in assets under management placing it as “a leading European player in the sector” managing long-term savings assets for insurers as well as pension funds.
AXA would receive cash proceeds of €5.1bn under the terms of the deal, with the total estimated transaction value expected to be €5.4bn, representing a multiple of 15x 2023 earnings.
The acquisition would also allow the combined businesses to benefit from AXA IM Alternatives’ leading market position and track record in private assets which will drive further growth with both institutional and retail investors.
With a CET impact of circa 25 bp for BNP Paribas, the expected return on invested capital of the transaction would be above 18% as soon as the 3rd year, following the end of the integration process.
The signing of the proposed transaction, expected by the end of the year, is subject to the information process and consultation of the employees’ representative bodies. The closing of the transaction is expected by mid-2025 once regulatory approvals have been obtained.
Jean-Laurent Bonnafé (pictured), director and CEO, BNP Paribas said: “This project would position BNP Paribas as a leading European player in long-term asset management. Benefiting from a critical size in public and alternative assets, BNP Paribas would serve its customer base of insurers, pension funds, banking networks and distributors more efficiently.
“The strategic partnership entered into with AXA, the cornerstone of this project, confirms the ability of both our groups to join forces. This major project, which would drive our growth over the long-term, would represent a powerful engine of growth for our Group.” said Jean-Laurent Bonnafé, Director and CEO, BNP Paribas.
Thomas Buberl, CEO of AXA said: “AXA Investment Managers has been a homegrown success story for the AXA Group. Over the past 25 years, we have built an exceptional franchise anchored in investment expertise, a relentless client focus and a proven track record on sustainability. Thanks to the quality of its teams, AXA IM is today a leading player, notably in Alternatives in Europe.”
“By joining forces with BNP Paribas, AXA IM would become a global asset manager with a wider product offering and a mutual objective to further their leading position in responsible investing. I would like to thank all AXA IM employees for their unwavering commitment, and their continued focus on delivering value for our clients.”
He further said: “In the context of a rapidly consolidating and highly competitive asset management industry, the group has considered different options to support the future development of Axa Investment Managers and to best align with the strategic goals of Axa to further simplify its business profile and grow its insurance businesses.”
Renaud Dumora, deputy chief operating officer, investment & protection services, BNP Paribas said: “The creation, within the Investment & Protection Services (IPS) division of the BNP Paribas Group, of a European leader in the management of long-term insurance and savings assets, would enable the IPS division to exceed EUR 2 trillion of assets entrusted by its clients.
“This operation would allow BNP Paribas Cardif to benefit from premium access to the services of an asset management expert on the asset classes required for insurance management. The combined expertise of the BNP Paribas Asset Management and AXA IM teams in public and private assets, as well as their leadership in sustainability, would be valuable assets to better meet future needs of clients.”
