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BNP Paribas (BNPQY) Intends to Buy AXA Investments Managers
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BNP Paribas SA (BNPQY - Free Report) entered into negotiations with AXA to acquire the entire stake in AXA Investment Managers (“AXA IM”), which holds roughly €850 billion in assets under management (AUM). Further, an agreement has been established between the two entities for a long-term partnership to manage a substantial portion of AXA’s assets.
The acquisition and the establishment of the partnership have been agreed at an amount of €5.1 billion upon closure, which is expected to occur in mid-2025.
BNP Paribas Cardif, the insurance business of BNPQY, directly engaged in the transaction. Thus, the company will have an opportunity to use this platform to manage up to €160 billion of its savings and insurance assets.
The newly formed entity, combining the contribution of BNP Paribas’ asset management platforms and AXA IM, will hold a total AUM of roughly €1,500 billion. This makes the entity a leading European player in the sector, particularly in managing long-term savings assets for insurers and pension funds with €850 billion of assets.
The acquisition will further enable the combined businesses to leverage AXA IM Alternatives’ leading position in private assets to boost growth via institutional and retail investors.
The acquisition is expected to reduce the common equity tier 1 (CET1) ratio of BNPQY by roughly 25 basis points (bps). Nonetheless, the expected return on invested capital is anticipated to be greater than 18% by the third year after the completion of the integration process.
Jean-Laurent Bonnafé, director and CEO of BNP Paribas, stated, “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.”
Renaud Dumora, deputy COO of Investment & Protection Services (IPS) at BNP Paribas, said, “The creation, within the 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.”
This move aligns with the BNP Paribas’ expansion strategy. This April, the company agreed to acquire a 9% stake in Fosun Group in Ageas with a total consideration of roughly €730 million. The deal is expected to have a minimal impact on BNPQY’s CET1 ratio of roughly 2 bps. Moreover, in July 2023, BNP Paribas completed the acquisition of Kantox, a leading fintech for the automation of currency risk management. This accelerates the development of technological innovation and enhances the customer experience.
Last month, Renasant Corp. (RNST - Free Report) and The First Bancshares Inc. (“The First”) jointly entered into a merger agreement. Per the agreement, The First will merge into Renasant for an all-stock consideration of $1.2 billion, based on the latter’s closing stock price of $37.09 as of Jul 26, 2024.
The merger will result in a six-state Southeastern banking franchise with roughly $25 billion in total assets, $18 billion in total loans and $21 billion in total deposits as of Jun 30, 2024.
Similarly, Eastern Bankshares Inc. (EBC - Free Report) completed its merger with Cambridge Bancorp. The deal, announced in September 2023 with a 100% stock consideration, aligns with the company’s inorganic growth strategy.
The merged private banking and wealth management divisions will work under the brand and leadership of Cambridge Trust as it has a distinct presence in its peer local markets. Other areas of the merged bank, including Commercial, Business and Consumer Banking, will operate under the EBC’s brand name.
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BNP Paribas (BNPQY) Intends to Buy AXA Investments Managers
BNP Paribas SA (BNPQY - Free Report) entered into negotiations with AXA to acquire the entire stake in AXA Investment Managers (“AXA IM”), which holds roughly €850 billion in assets under management (AUM). Further, an agreement has been established between the two entities for a long-term partnership to manage a substantial portion of AXA’s assets.
The acquisition and the establishment of the partnership have been agreed at an amount of €5.1 billion upon closure, which is expected to occur in mid-2025.
BNP Paribas Cardif, the insurance business of BNPQY, directly engaged in the transaction. Thus, the company will have an opportunity to use this platform to manage up to €160 billion of its savings and insurance assets.
The newly formed entity, combining the contribution of BNP Paribas’ asset management platforms and AXA IM, will hold a total AUM of roughly €1,500 billion. This makes the entity a leading European player in the sector, particularly in managing long-term savings assets for insurers and pension funds with €850 billion of assets.
The acquisition will further enable the combined businesses to leverage AXA IM Alternatives’ leading position in private assets to boost growth via institutional and retail investors.
The acquisition is expected to reduce the common equity tier 1 (CET1) ratio of BNPQY by roughly 25 basis points (bps). Nonetheless, the expected return on invested capital is anticipated to be greater than 18% by the third year after the completion of the integration process.
Jean-Laurent Bonnafé, director and CEO of BNP Paribas, stated, “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.”
Renaud Dumora, deputy COO of Investment & Protection Services (IPS) at BNP Paribas, said, “The creation, within the 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.”
This move aligns with the BNP Paribas’ expansion strategy. This April, the company agreed to acquire a 9% stake in Fosun Group in Ageas with a total consideration of roughly €730 million. The deal is expected to have a minimal impact on BNPQY’s CET1 ratio of roughly 2 bps. Moreover, in July 2023, BNP Paribas completed the acquisition of Kantox, a leading fintech for the automation of currency risk management. This accelerates the development of technological innovation and enhances the customer experience.
In the past year, shares of BNPQY have gained 6%.
BNP Paribas SA Price
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Currently, BNP Paribas carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Banks
Last month, Renasant Corp. (RNST - Free Report) and The First Bancshares Inc. (“The First”) jointly entered into a merger agreement. Per the agreement, The First will merge into Renasant for an all-stock consideration of $1.2 billion, based on the latter’s closing stock price of $37.09 as of Jul 26, 2024.
The merger will result in a six-state Southeastern banking franchise with roughly $25 billion in total assets, $18 billion in total loans and $21 billion in total deposits as of Jun 30, 2024.
Similarly, Eastern Bankshares Inc. (EBC - Free Report) completed its merger with Cambridge Bancorp. The deal, announced in September 2023 with a 100% stock consideration, aligns with the company’s inorganic growth strategy.
The merged private banking and wealth management divisions will work under the brand and leadership of Cambridge Trust as it has a distinct presence in its peer local markets. Other areas of the merged bank, including Commercial, Business and Consumer Banking, will operate under the EBC’s brand name.