The major French bank BNP Paribas wants to become the number two in the fund business in Europe with the takeover of AXA's asset management business worth a good five billion euros.

Europe's largest bank and the second largest European insurer confirmed exclusive negotiations on the merger in a fiercely competitive market. Together, the two would have assets under management of around 1.5 trillion euros and would rank only behind France's Amundi, which manages 2.16 trillion euros, but would overtake Natixis IM. With 850 billion euros in assets under management, AXA Investment Managers is even larger than BNP's fund division with just under 600 billion euros.

AXA sees the sale as an important strategic step - in future, the insurer would concentrate on its core business with life, property, health and accident insurance as well as savings products. The aim is to "simplify the business profile and expand the insurance business", said AXA CEO Thomas Buberl. The Select investment division is also to go to BNP with AXA Investment Managers. According to the plans, BNP Paribas would manage large parts of AXA's investments via the merged asset management company for at least 15 years. The purchase price is to be paid in cash.

AXA shareholders are also to benefit from this: AXA intends to use around 3.8 billion euros for share buybacks. The rest of the proceeds will be spent on "organic and inorganic growth", said AXA Deputy CEO Frederic de Courtois. Shortly before the plans were published, AXA announced the 423 million euro takeover of the Italian insurer Gruppo Nobis.

The sale to BNP Paribas will result in a book profit of 2.2 billion euros for AXA. The transaction is expected to be completed by mid-2025. This was well received by analysts. RBC explained that the transaction makes strategic sense. Deutsche Bank spoke of a "win-win situation".

IN GERMANY, ALLIANZ IN PARTICULAR IS CONSOLIDATING

In Germany, consolidation in asset management has mainly taken place under the umbrella of the insurer Allianz. Both the fund subsidiary of the former Dresdner Bank and the Commerzbank subsidiary Cominvest have been merged into Allianz Global Investors (AllianzGI). Allianz manages almost 1.8 trillion euros worldwide for third parties, but the majority of this is held by the US subsidiary Pimco. The Deutsche Bank subsidiary DWS has 933 billion euros and is on the lookout for takeovers in order to become larger.

AXA's core business performed better than expected in the first half of the year. Premium income and other revenues totaled 59.9 billion euros, seven percent more than a year earlier. This was slightly above analysts' estimates. The adjusted profit rose by four percent to 4.2 billion euros, the solvency ratio at the end of June was 227 percent.

(Report by Mathieu Rosemain and Alexander Hübner, edited by Sabine Wollrab. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)