BNP Paribas is in unique talks with French insurer AXA to purchase 100% of its AXA Funding Managers arm at an agreed value of 5.1 billion euros ($5.50 billion), the euro zone’s largest financial institution stated on Thursday.
For BNP, such an acquisition would considerably enhance its asset administration arm because the business is in a race for dimension to realize economies of scale and decrease prices.
This represents a significant strategic transfer for AXA, Europe’s second-biggest insurer, because it goals to deal with its core companies: life insurance coverage, financial savings, property and casualty insurance policies in addition to medical insurance.
The would-be mixed entity would have complete belongings below administration of about 1.5 trillion euros, BNP stated in an announcement, and it will develop into one of many prime European asset managers after chief Amundi, which had 2.16 trillion euros of belongings below administration on the finish of June.
BNP stated it anticipated the transaction to shut in mid-2025. The financial institution stated the acquisition will have an effect of about 25 foundation factors on its CET1 ratio — a key measure of economic energy.
AXA stated in a separate assertion that BNP would pay 5.1 billion euros in money.
AXA added that it will obtain 300 million euros as well as for the acquisition by AXA IM of Choose, an organization owned by AXA that gives funding options, reminiscent of administration of funds.
The French insurer stated it will use 3.8 billion euros’ value of proceeds from these gross sales in share buybacks. The remainder of the proceeds will likely be spent on “natural and inorganic development,” AXA Deputy CEO Frederic de Courtois stated in a name with reporters.
The transaction additionally features a 15-year settlement below which BNP would supply funding administration providers to AXA.
The deal talks have been introduced as AXA reported a stronger-than-expected rise in income within the first half of the yr, with the group saying its efficiency was pushed by development in its property & casualty and life & medical insurance enterprise.
Within the first six months of the yr, the French insurer recorded gross written premiums and different revenues of 59.9 billion euros. That was up 7% year-on-year and above analysts’ expectations, who had forecast a median results of 59.4 billion euros in a consensus compiled by AXA.
Underlying earnings elevated by 4% to 4.2 billion euros whereas AXA’s solvency ratio, a key measure of its monetary well being, stood at 227% on the finish of June.
AXA additionally introduced on Thursday the acquisition of Italian insurer Gruppo Nobis for 423 million euros, a deal it expects to happen earlier than the top of the primary half of 2025.
($1 = 0.9276 euros)
(Reporting by Mathieu Rosemain; extra reporting by Anousha Sakoui and Augustin Turpin; enhancing by Sudip Kar-Gupta, Susan Fenton and Alistair Bell)
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