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Amundi’s acquisition of Pioneer Investments from UniCredit should be a win for both firms, and breathe some life into Italy’s beleaguered banking sector.

The French asset manager will acquire former rival Pioneer from UniCredit, Italy’s largest bank, for €3.6 billion ($3.8 billion). “The deal is a positive for all the parties involved”, said Ion-Marc Valahu of Swiss investment firm Clairinvest. “UniCredit raises some money and Amundi boosts its market presence.”

Amundi has been on an expansion spree, with the aim of winning market share in Europe and Asia. The Pioneer acquisition will strengthen its position in Europe considerably, bringing its total assets under management to €1,276 billion. It also gets a boost in the global banking sector, becoming the world’s eighth-largest asset manager. Italy will be its second-biggest market.

Investors lauded the deal, sending Amundi’s shares up by as much as 8.5% to record highs. The French asset manager expects its earnings per share to increase by over 5%.

“It’s a vote of confidence in Italy”, said Xavier Musca, Deputy CEO of Credit Agricole, which controls Amundi. As part of the transaction, Amundi will form a long-term strategic partnership with UniCredit for product distribution.

For its part UniCredit stands to gain €2.2 billion in much-needed capital, along with a surprising €315 million dividend payment from Pioneer. As Reuters reports, UniCredit CEO Jean-Pierre Mustier, who was hired in July, “has been trying to tackle long-standing concerns about the bank's stretched capital levels.” He has been selling assets, including a 30% stake in online bank FinecoBank and a 33% stake in Poland’s Bank Pekao PEO.WA.

Mustier recently released details of his new business strategy, the centrepiece of which is a plan to raise a record €13 billion in funding from shareholders. His strategy also includes restructuring, layoffs, branch closures and other cost-slashing measures.

Italy’s banking sector has been dragged down by bad debt as well as political instability following this month’s resignation of Prime Minister Matteo Renzi.

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