The BNP Paribas Group has announced that it has entered into exclusive negotiations with AXA to acquire 100 per cent of AXA Investment Managers (AXA IM), representing close to EUR850 billion in assets under management, together with an agreement for a long-term partnership to manage a large part of AXA’s assets.
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 EUR160 billion of its savings and insurance assets.
The bank writes that, with the combined contribution of BNP Paribas’ asset management platforms, the newly formed business, whose total assets under management would amount to EUR 1,500 billion, would become a leading European player in the sector.
“Specifically, it would become the European leading player in the management of long-term savings assets for insurers as well as pension funds, with EUR850 billion of assets, leveraging powerful platforms of public and private assets. 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,” the statement says.
The agreed price for the acquisition and the set-up of the partnership is of EUR5.1 billion at closing, expected mid-2025.
With a CET1 impact of circa 25 bp for BNP Paribas, the expected return on invested capital of the transaction would be above 18 per cent as soon as the 3rd year, following the end of the integration process, the bank says.
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.
“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.” says Jean-Laurent Bonnafé, Director and CEO, BNP Paribas.
“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.” says Thomas Buberl, CEO of AXA. “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.”
“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 EUR2 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,” says Renaud Dumora, Deputy Chief Operating Officer, Investment & Protection Services, BNP Paribas.
Johann Scholtz, Senior Equity Analyst and banking expert at Morningstar, commented on the deal, saying: “BNP Paribas has agreed to acquire AXA Investment Management for EUR 5.1 billion in cash. While this values AXA IM at 14 times its earnings over the last 12 months—a premium compared to peers like Amundi and Schroders—strategically, the deal makes sense.
“AXA IM’s expertise in alternative assets will compliment BNP’s asset management, investment banking, and wealth management services. Although the acquisition will only boost our 2024 earnings estimate for BNP by around 5 per cent, it offers significant revenue synergies. BNP’s high-net-worth and institutional clients are likely to be very interested in AXA IM’s alternative assets, particularly its EUR 218 billion in real estate and private debt assets. Despite using up most of BNP’s excess capital and ruling out future share buybacks, the acquisition is a strategic move, given AXA IM’s potential for steady earnings growth.”
