AXA announced yesterday it had entered into an exclusive negotiation to sell its asset management business AXA Investment Managers (AXA IM) to BNP Paribas for cash proceeds of €5.1bn.
The intention to exit the asset management business further emphasises the group’s strategy to simplify its business model and to focus on its core insurance activities, the firm announced yesterday.
In particular, AXA’s Life & Savings business “is well-positioned to grow, driven by the group’s strong distribution and product design capabilities, and our customers will benefit from a broader array of asset classes, including continued access to a best-in-class alternatives asset management platform”, it added.
In addition to selling AXA IM to BNP Paribas, AXA would receive a €300m consideration from the sale of Select – formerly Architas, which offers investment solutions to retail customers in France, Belgium, Hong Kong, and Indonesia — to AXA IM prior to the closing of the proposed sale.
The total estimated transaction value is expected to be €5.4bn, representing a multiple of 15 times 2023 earnings, it was announced.
The proposed sale of AXA’s €844bn investment management business to BNP Paribas could also see the creation of two enlarged real estate and infrastructure fund managers with assets under management (AUM) of €108bn and €19.7bn, respectively.
Under the terms of the proposed transaction, AXA and BNP Paribas would also enter into a long-term strategic partnership under which BNP Paribas would provide investment management services to AXA.
The combination of AXA IM and BNP Paribas would create a leading European asset manager, with total AUM of €1.5trn.
“In the context of a rapidly consolidating and highly competitive asset management industry, the [AXA] Group has considered different options to support the future development of AXA IM and to best align with the strategic goals of AXA to further simplify its business profile and grow its insurance businesses,” said Thomas Buberl, AXA’s chief executive officer.
“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. This long-term partnership would provide AXA and its customers with continued access to a wide range of best-in-class investment solutions that would further strengthen our strategic ambitions in Life & Savings,” added Jean-Laurent Bonnafé, director and CEO of BNP Paribas.
“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.” said Renaud Dumora, deputy chief operating officer, investment and protection services at BNP Paribas.
The completion of the transaction is subject to customary closing conditions, including the information and consultation of employee representative bodies, followed by the signing of the Share Purchase Agreement and the receipt of regulatory approvals, and is expected to be finalised by the second quarter of 2025.
Increase in M&A activity
There has been a marked increase in mergers and acquisitions within the insurance and institutional asset management space recently as firms seek to enhance their capabilities, expand their client base, and remain competitive in a rapidly evolving market.
This trend is driven by several factors, including regulatory changes, technological advancements, the desire for scale, and the pursuit of diversification.
Last summer, Dutch life insurance company Aegon announced the completion of the combination of its Dutch pension, life and non-life insurance, banking, and mortgage origination activities with a.s.r., and the beginning of its asset management partnership with a.s.r. As part of the transaction, Aegon received €2.2bn cash proceeds and a 29.99% stake in a.s.r.
UK-based insurer Legal & General more recently merged Legal & General Investment Management (LGIM) and Legal & General Capital (LGC) to create a single asset management division as the group refreshed its strategy.
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