Amundi, Europe’s largest asset manager by AuM, has signed a binding agreement with UniCredit to acquire Pioneer Investments for an all-cash consideration of €3,545m. The transaction is expected to close in the first half of 2017.
As part of the transaction, Amundi will form a long-term partnership with UniCredit for the distribution of asset management products.
The acquisition will create the eighth largest asset manager globally with €1,276bn of assets.
With the partnership with UniCredit secured by a 10-year distribution agreement for Italy, Germany and Austria, the combined entity will be number one in France, and within the top three in Italy and Austria.
Italy will become Amundi’s second biggest market, with €160bn AuM, and Milan will become one of the group’s investment hubs. The number of staff in Milan will therefore significantly increase.
The deal will also bolster Amundi’s leadership in serving retail networks and improving its customer mix by increasing the proportion of higher-margin retail customers from 27% currently to 35% post transaction.
Pioneer and UniCredit retail and private banking clients will benefit from Amundi services including Smart Beta, ETF, real and alternative assets, structured and guaranteed solutions, discretionary asset management, global fixed income, global equities as well as money market funds.
The acquisition of Pioneer is expected to be accretive to Amundi's earnings per share by 30%, taking into account the full-year effect of synergies and excluding restructuring costs.
At an acquisition price of €3,545m, the net tangible equity of Pioneer at the closing of the transaction will equate to €500m, which is €300m above regulatory requirements.
The transaction will be financed by €1.5bn of excess capital, a €1.3bn capital increase and a €0.6bn of senior and subordinated debt. The rights issue will be launched by H1 2017 and will be underwritten by Credit Agricole Group.