UniCredit looks to offload Pioneer in Santander AM merger

UniCredit, the Italian bank, is looking to merge asset management arm Pioneer in a deal with Banco Santander’s subsidiary business to create one of Europe’s largest managers.

Spanish bank Banco Santander has reportedly agreed to discuss the merger of the two businesses after selling half of its stake in Santander Asset Management to private equity investors last year.

A statement from the Spanish bank confirmed it had entered discussions with UniCredit.

A spokesman said Banco Santander – alongside its fellow private equity owners of Santander Asset Management, Warburg Pincus and General Atlantic – are looking at the integration of the company with Pioneer Global Asset Management.

“As of today,” he added, “no agreement has been reached about the potential structure or terms of this potential transaction. Santander will inform the market at a later stage in case an agreement between both parties is reached.”

Milan-based UniCredit has been looking to shift Pioneer from its books for some time, and saw the collapse of a sale to French asset manager Amundi during the euro-zone crisis.

The Italian bank had been evaluating bids for Pioneer before entering exclusive discussions with Banco Santander for the potential merger.

Other bidders were reportedly from the private equity space.

According to local media reports, private equity firm Advent International and a consortium comprising CVC Capital Partners and Singapore sovereign fund GIC were other potential bidders for Pioneer.

The move by UniCredit and Banco Santander comes as European banks look to offload asset management businesses to shore up capital reserves in the light of new EU regulation.

The merged entities would create a business with close to £300bn (€382bn) in assets under management, with both Pioneer and Santander Asset Management reporting AUM of close to £148bn in 2014.

According to reports, under the new arrangement, UniCredit, Banco Santander and private equity owners Warburg Pincus and General Atlantic would each own one-third of the merged business.