BNP Paribas confirms the strategic and industrial interest in the acquisition of Axa Investment Managers and foresees the closing of the deal for the'early July 2025. However, it has lowered its targets by return on capital invested after the update of the guidelines of the European Central Bank on the treatment for the acquisition of asset management companies and in particular on the so-called Danish compromise: the ECB has declared itself against to the French group's use of favourable capital treatment.
The ECB on this front had already expressed itself unfavorably in the case ofBanco Bpm's takeover bid for Anima, and could have negative implications for the consolidation of the European financial sector, making M&A transactions more expensive from a capital perspective.
Return on capital of over 14% in the third year, Cet1 at -35 bps
BNP Paribas has lowered its return on equity forecast for its €5,1 billion acquisition of Axa Investment Managers, the French bank said in a statement this morning, adding that it expected a return on capital of over 14% in the third year, down from 18% previously. That return should be above 20% in the fourth year, he added.
Based on the ECB's interpretation of the prudential treatment for acquisitions of asset management companies, BNP Paribas estimates the impact of the transaction on its CET1 ratio, a key measure of its financial health, at around -35 basis points (bps), compared to the -25 bps previously expected.
Le Bnp shares lost 2,41% on Friday, underperforming the entire European banking sector, after the news agency Bloomberg had anticipated the ECB's decision, while this morning they gained 3,43%.
The terms and conditions of the transaction will be announced at closing, according to the press release. The French group aims to create with this operation a leading wealth management platform enabling it to become the leading European operator in long-term savings management for insurers and pension funds. This platform will benefit from Axa IM's market leadership position and the expertise of its team specializing in private wealth, which will drive further growth among both institutional and retail investors.
More generally, BNP Paribas has confirmed its programme of buyback of own shares, announced in February 2025 and already approved by the ECB, as well as the group's distribution policy remains unchanged, in the form of dividends and remuneration to shareholders, remains unchanged. The conditions agreed by the Group regarding the prudential treatment to be applied to this transaction will be communicated at the closing, expected in July 2025.
