UniCredit sold Pioneer to French Amundi for 3,545 billion. The binding agreement signed by the banking group excludes the Pioneer business in Poland, sold in recent days and, in addition to the agreed consideration, also provides for the payment of an extraordinary dividend of 315 million which Unicredit will receive before the closing of the operation. The title it is clearly on the rise in Piazza Affari.
In a note Unicredit underlines that the operation will have a positive on the CET1 of the institute in Piazza Gae Aulenti estimated at around 78 basis points.
As part of the transaction, UniCredit and Amundi will form a strategic partnership for the distribution of asset management products in Italy, Germany and Austria consolidated by a ten-year distribution agreement. UniCredit will reposition itself on a business model focused on distribution, while maintaining exposure to fee and commission income generated by the placement of asset management products.
The transaction will generate a net capital gain for UniCredit at consolidated level of €2,2 billion in 2017, with a positive impact on UniCredit's Common Equity Tier 1 estimated at around 78 basis points, according to the group's statement.
The transaction, approved by the Boards of Directors of UniCredit, Pioneer and Amundi, is subject to the customary conditions precedent, including the obtaining of the necessary approvals from the supervisory and antitrust authorities. The closing of the transaction is expected within the first half of 2017.
Commenting on the transaction, Jean Pierre Mustier, Chief Executive Officer of UniCredit, stated: “The sale of Pioneer to Amundi is another tangible example of UniCredit's new strategic approach announced on 11 July 2016. Pioneer, its team, and its retail and institutional clients will become part of a primary operator in asset management, recognized worldwide. Thanks to a long-term distribution agreement, UniCredit's customers will have access to a wider range of quality products and services while the Group will benefit from higher distribution fee income resulting from higher expected inflows. Following the transaction, Italy will become the second domestic market for Amundi, and Milan in particular will represent one of its main investment centres, with the creation of new jobs and at the same time ensuring proximity to UniCredit, our employees and customers.”
The Unicredit group presents itself to analysts tomorrow in London with the Capital Markets Day during which Jean Pierre Mustier will update investors on the implementation of the group's strategic plan and on the adjustments made in these first few months since his appointment to lead the credit giant .
On the French side, however, to support the purchase of Pioneer Amundi will launch a capital increase of 1,4 billion. The transaction is expected to produce pre-tax synergies of approximately €180 million on an annual basis, with full implementation within 3 years: approximately €150 million of cost synergies should be realized thanks to the unification of investment platforms, the optimization of IT services and the rationalization of administrative and back-office costs; 30 million euros in revenue synergies are expected from potential cross selling and other forms of revenue optimization (brokerage…) . The total integration costs are estimated at around 190 million euros before tax and are expected to be realized in 2017 and 2018
The acquisition of Pioneer should also generate an increase in Amundi's Earnings Per Share of around 30%, accounting for the effect of synergies on an annual basis and excluding restructuring costs. The return on investment (so-called Return on Investment) of the acquisition within three years is in line with Amundi's target of 10%.
Finally, the transaction should have a positive effect on the net profit per share of the parent company Crédit Agricole Sa of more than 5%, taking into account the expected synergies and excluding the restructuring costs, the bank also specifies. The impact of the transaction on Credit Agricole Sa's Cet1 will affect between 55 and 85 basis points, based on a stake in Amundi's capital increase that translates post-acquisition into a stake held by Ca between 66,7% and 75,6%. Ca's dividend policy – underlines the note – remains unchanged. For the Credit Agricole group, the acquisition of Pioneer by Amundi is "in line with the objectives of the Ambition Strategique 2020 Medium-Term Plan".
