Photographer: Jason Alden/Bloomberg

BNP Among Firms Eyeing Axa Fund-Management Tie-Up

  • Axa unit also said to be in talks for combination with Natixis
  • Jobs, cost cuts seen as hurdles in Natixis-Axa negotiations

BNP Paribas SA is among firms exploring a fund-management tie-up with Axa SA’s European asset-management unit, people with knowledge of the matter said as the French insurer seeks potential partners for the business, people with knowledge of the matter said.

France’s largest bank has studied the feasibility of combining BNP’s money-management unit with Axa Investment Managers, the people said, declining to be identified because the matter is private. Axa is currently holding talks with competitor Natixis SA about combining their asset-management operations, according to two people familiar with the discussions.

Axa is under growing competition from exchange-traded funds and regulations that encourage consolidation. Any transaction could be a precursor for an eventual initial public offering or partial sale, but no decision has been reached and Axa may decide to retain the investment management unit as it is, the people said. Axa, BNP Paribas and Natixis declined to comment.

Axa rose as much as 0.6 percent to 24.81 euros by 12:35 p.m. in Paris, one of the top three performers in the Bloomberg Europe 500 Insurance Index. BNP Paribas rose 0.2 percent and Natixis’s shares were up 0.3 percent.

While a Natixis purchase of Axa Investment Managers might have “strategic merits,” a deal is unlikely given the size, JPMorgan Chase & Co. analysts wrote in a note. Natixis has focused on smaller acquisitions aimed at filling needs in targeted areas such as equities, alternative investments and emerging markets, they added.

Discussion Points

Hurdles in the talks between Axa and Natixis include reaching an agreement on job cuts and cost reductions, people familiar with the discussions said. Which assets and geographies would be involved in any combination is also a point of negotiation, one person said.

Axa Investment Managers oversaw 735 billion euros ($879 billion) in assets at the end of June, according to its website. The Paris-based business reported annual sales of about 1.2 billion euros in 2016, a 3 percent decline from a year earlier.

BNP Paribas Asset Management, led by Frederic Janbon, had 416 billion euros under management at the end of 2016. It aims to increase that by 5 percent annually through 2020.

The leader in France remains Amundi SA, created in 2010 when Credit Agricole SA and Societe Generale SA combined their asset-management businesses. Societe Generale sold its stake when Amundi went public in Paris in November 2015. The stock has climbed about 50 percent since then, data compiled by Bloomberg show.

— With assistance by Geraldine Amiel

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