Amundi won the race to buy Sabadell Asset Management after agreeing a €430m cash deal last week to acquire the €21.8bn fund arm of the Spanish lender.
The deal doubles Amundi’s presence in Spain’s €600bn asset management market, which ranks as the fourth largest in Europe.
The acquisition marks another coup for the deal-hungry chief executive of Amundi, Yves Perrier, who faced competition from rivals Allianz, the German insurer, and Candriam, which were also interested in bidding for Sabadell Asset Management.
“The acquisition of Sabadell Asset Management will significantly reinforce Amundi’s position in Spain, a major savings market in Europe,” said Mr Perrier.
As part of the deal, the Spanish lender and Paris-based asset manager have also announced a 10-year strategic partnership for the distribution of Amundi savings and investment products across Banco Sabadell’s network of 1,900 branches in Spain.
“This alliance will allow our customers to access new investment opportunities and a wider range of products,” said Josep Oliu, chairman of Banco Sabadell.
Two-thirds of retail investment funds in Spain are sold via banks and incentive payments to financial advisers for directing customers towards Amundi’s products have been increased.
“Amundi will be able to accelerate sales as it broadens the product range available to Banco Sabadell ‘s customers,” said Chris Turner, an analyst at Berenberg.
The €430m price paid is equivalent to a multiple of 13x Sabadell’s estimated 2020 earnings, towards the top end of valuations for other European asset managers.
Executives at the French fund house said they were “very confident” that Amundi would be able to achieve synergies worth about €20m through a combination of cost savings and revenue boosting measures.
Sabadell AM registered net profits of €34m in 2019 and the deal is expected to provide an immediate boost to Amundi’s earnings.
“This is not a transforming deal for Amundi but it makes sense both financially and strategically,” said Flora Benhakoun, an analyst at Deutsche Bank in London.
Most of the surplus cash on Amundi’s balance sheet will be utilised by the deal but it is expected to rapidly rebuild its capital position. Amundi’s management said that buying Sabadell AM would not prevent it from pursuing other deals and that it would continue to look for further opportunities.
Mr Perrier orchestrated the acquisition of the Italian asset manager Pioneer in 2016 and deals have been a key plank of his long-term strategy to build Amundi into a competitor to BlackRock and Vanguard.
The transaction is subject to regulatory approvals and is expected to close in the third quarter of 2020.
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