Axa is hoping to exit the asset management industry after entering into an exclusive negotiation to sell its investment management arm to French rival BNP Paribas.
Under the terms of the proposed transaction, Axa and BNP Paribas will enter into a long-term strategic partnership under which BNP Paribas will provide investment management services to Axa.
The combination of Axa Investment Managers and BNP Paribas will create a European asset manager, with total assets under management of EUR 1.5 trillion .
In an announcement late on Thursday (1 August), the insurance group said the company would be “exiting” the asset management business to simplify its business model and focus on its core insurance activities.
Thomas Buberl, chief executive officer of Axa, said by “joining forces” with BNP Paribas, Axa Investment Managers would become a “global asset manager” with a wider product offering and an objective to further its focus on responsible investing.
He said: “In the context of a rapidly consolidating and highly competitive asset management industry, the group has considered different options to support the future development of Axa Investment Managers and to best align with the strategic goals of Axa to further simplify its business profile and grow its insurance businesses.”
The company said Axa’s Life and Savings business is well-positioned to grow, driven by the group’s strong distribution and product design capabilities, adding that its customers will benefit from a broader array of asset classes, including continued access to a best-in-class Alternatives asset management platform.
Axa added that it retains full authority over product design, asset allocation and asset-liability management decisions.
Axa will receive cash proceeds of EUR 5.1 billion under the terms of the deal. The total estimated transaction value is expected to be Euro 5.4 billion, representing a multiple of 15x 2023 earnings.