Amundi, Allianz and the vagaries of M&A
Allianz pauses dealmaking talks with Amundi
As recently as Saturday morning Amundi and its majority shareholder Crédit Agricole were in exclusive talks with Allianz over plans to combine the German insurer’s €560bn investment management arm with its larger French rival.
A deal — which was projected to value Allianz Global Investors at north of €6bn — would have marked the culmination of more than a year of on-and-off discussions between the two sides, and formed a European giant with almost €2.8tn of assets under management.
On Saturday afternoon, Allianz unexpectedly paused the talks, Olaf Storbeck and I revealed later that day.
The hiatus — which may prove temporary — illustrates the difficulty of pulling off large-scale mergers and acquisitions in asset management and comes as a wave of consolidation is sweeping across the industry.
One recent deal that has left almost everyone in Europe casting an eye around for potential dance partners is BNP Paribas’s €5bn acquisition of Axa Investment Managers to create a €1.5tn European champion. (Amundi also held talks to buy Axa Investment Managers earlier this year, but the two sides were not able to agree terms.)
For years investment managers around the world have been turning to M&A to pursue scale, growth markets and new clients as margins are squeezed by higher costs and lower fees. In Europe right now the pressure is particularly acute because of the continued march of the large American firms — think BlackRock, Goldman Sachs Asset Management and JPMorgan Asset Management — into the European market.
Meanwhile, a further driver of consolidation is that banks and insurers are weighing up their commitment to their investment management divisions and evaluating the merits of doubling down (Legal & General), striking strategic partnerships (Generali) or quitting the business altogether (NN Group).
The key sticking points between Allianz and the Amundi camp appear to be the structure of any tie-up and a struggle to agree on who would have control of an enlarged entity. Of course scale for scale’s sake is not enough, and so far neither side appears to have publicly articulated what the strategic logic of a tie-up was for their clients.
Others said that while Amundi saw a potential transaction as an “acquisition” of Allianz Global Investors, the Germans wanted a partnership that would help increase its income from asset management.
As René Magritte might have said on Allianz’s behalf: “Ceci n’est pas une acquisition.”