France’s Amundi to buy Pioneer from UniCredit for 3.6 bn euros

PARIS: French asset manager Amundi has agreed to buy rival Pioneer Investments from Italian bank UniCredit for 3.6 billion euros (£3.01 billion), extending its reach in Europe and bringing in some much-needed capital for UniCredit.
Amundi’s share price surged more than 6 per cent to record highs following the announcement, as analysts welcomed the deal, which should boost earnings for both Amundi and majority owner Credit Agricole, while UniCredit shares also rose.
The Pioneer sale follows on the heels of UniCredit’s sale of its Polish assets last week and is expected to be followed by the announcement of a massive share issue this week worth up to 13 billion euros as it seeks to shore up its balance sheet.
“The deal is a positive for all the parties involved. UniCredit raises some money and Amundi boosts its market presence,” said Clairinvest fund manager Ion-Marc Valahu, who holds shares in European banks.
UniCredit’s chief executive Jean-Pierre Mustier, a former top banker at Societe Generale who along with Amundi’s CEO Yves Perrier managed the creation of the French asset manager back in 2009-2010, also signed an agreement that gives Amundi access to UniCredit’s distribution networks in Italy, Germany and Austria for up to 10 years.
Amundi will finance the deal via a 1.4 billion share issue and the issue of around 0.6 billion euros of senior and subordinated debt, with the rights issue to be launched in the first half of 2017. It also has 1.5 billion euros in excess capital.
UniCredit said the sale of Pioneer would boost its best-quality capital adequacy ratio by around 0.78 per- centage points and it would also receive an extraordinary dividend payment of 315 million euros before the closing of the sale, which is expected in the first half of 2017.
The sale would also result in it booking a net gain of 2.2 billion euros, the bank said.
Amundi is on an expansion spree following its stock market flotation by French banks Credit Agricole and SocGen in 2015, which resulted in SocGen selling out, and the company is aiming to win market share in Europe and Asia. — Reuters