Unicredit has agreed the sale of Pioneer Investments, which served as its asset management arm, to France's Amundi for over €3.5bn (US$3.7bn) in cash. The deal excluded Pioneer's business in Poland, which was part of another sale last week, while the deal also included a 10-year agreement for the distribution of Amundi Asset Management products through Unicredit's networks.
Pioneer has over €222bn in assets under management (AUM), and its funds have been the underlyings for 174 products, according to the SRP database. The products include Unicredit's Bank Austria GarantAnleihe auf den PIA Ethik Fonds, a seven-year growth product that offers 100% capital protection and 80% participation in the Pioneer Funds Austria-Ethik Fonds. Pioneer has also been the distributor of 67 products, almost exclusively funds, according to the SRP database. Pioneer's structured funds accounted for 5% of overall structured products sales in Europe in 2014, with $5.6bn in sales, according to SRP data.
The asset manager generated €919m in operating income and €287m in pre-tax profit in 2015, up from €791m and €286m for 2014, respectively. These compare with €731m and €192m for 2013, and €704m and €199m for 2013. However, the disposal will reinforce Unicredit's capital position, generating a consolidated net capital gain of €2.2bn and improve its Common Equity Tier 1 ratio by 78 basis points.
Amundi expects the acquisition to produce about €180m in pre-tax synergies in 2017, and €190m in each of the following two years. These will be realised from cost savings by merging platforms and streamlining back-office functions, as well as from revenue from cross selling and brokerage, according to the French asset manager. Amundi will finance the deal with €1.5bn of existing capital, €1.4bn in new capital and €600m of senior and subordinated debt. Credit Agricole, majority owner of Amundi, will underwrite the capital issuance.
As part of the sale agreement, the two companies plan to form a long-term strategic partnership for the distribution of Amundi's asset management products on Unicredit's networks in Italy, Germany and Austria. 'Pioneer Investments will reinforce Amundi's product expertise, broaden its distribution channels and networks, and generate significant synergies,' said Xavier Musca, chairman of the board of directors of Amundi, in a press release. Pioneer has a highly complementary business and geographic profile, according to Yves Perrier, chief executive of Amundi.
The sale has received the support of both boards of directors and is now subject to customary closing conditions, regulatory and antitrust approvals. Completion is expected to close in the first half of 2017, according to the two companies.
Amundi's operations in Poland, in the form of a 32.8% stake in Bank Pekao, were sold under a separate agreement. The Polish lender was the co-owner of Pioneer's Poland operations, and passed its asset management to the new owners. Bank Pekao has distributed 95 products, including three offers in 2016, according to SRP data. The bank is also the bond provider for 10 products listed on SRP.
Meanwhile, after several years of absence, Unicredit certificates have begun trading on the Warsaw Stock Exchange, after a non-public placement by Alior Bank Private Banking. Alior Bank is arranging further issues of Unicredit structured products to be introduced to trading on GPW, according to Marcin Kobus, head of savings products at Alior Bank.
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