AXA is set to sell its asset management arm to BNP Paribas in a deal worth €5.4bn, both firms have announced.
If the acquisition goes through, AXA Investment Managers would combine with BNP Paribas’ asset management division to create a business with €1.5trn AUM.
BNP Paribas will pay €5.1bn for AXA IM, while AXA will receive a further €300m for the sale of its Select division prior to the sale to BNP Paribas.
BNP Paribas said its insurance business, BNP Paribas Cardif, would have the opportunity to use the business for the management for up to €160bn of its assets.
The deal is expected to close by the second quarter of 2025, following regulatory approval.
See also: IA: UK investment management industry reaches £9.1trn in AUM for 2023
Jean-Laurent Bonnafé, director and CEO of BNP Paribas, said the acquisition would position BNP Paribas as a “leading European player” in long-term asset management.
“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.”
Reacting to the deal, Johann Scholtz, senior equity analyst at Morningstar, said it represents a strategic acquisition for BNP Paribas.
“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,” he said.
“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%, 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 €218bn 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.”
