BNP Paribas to acquire AXA Investment Managers in €5.4 billion deal

BNP Paribas Group announces today that has entered into exclusive negotiations to acquire AXA Investment Managers (AXA IM), the asset management arm of AXA. This acquisition, valued at approximately €5.4 billion, marks a strategic shift for both entities. BNP Paribas aims to bolster its asset management capabilities, while AXA focuses on streamlining its business model to concentrate on core insurance activities.

The deal, which includes €5.1 billion in cash proceeds and an additional €300 million from the sale of Select to AXA IM, is expected to be finalised by mid-2025.

This acquisition will not only enhance BNP Paribas’s asset management portfolio but also establish a long-term partnership where BNP Paribas will manage a significant portion of AXA’s assets. The combined entity is poised to manage €1.5 trillion in assets, positioning it as a leading European player in asset management.

Details of the deal

The acquisition of AXA Investment Managers by BNP Paribas is structured to include €5.1 billion in cash proceeds and an additional €300 million consideration from the sale of Select to AXA IM prior to the closing of the proposed transaction. Select, formerly known as Architas, is an AXA company that offers investment solutions, including fund management and advisory services, to retail customers in France, Belgium, Hong Kong, and Indonesia. This transaction is expected to be finalised by mid-2025, subject to customary closing conditions and regulatory approvals.

Under the terms of the proposed transaction, AXA and BNP Paribas will also establish a long-term strategic partnership. This partnership will see BNP Paribas providing investment management services to AXA, thereby creating a synergistic relationship that leverages the strengths of both entities. The combined entity will manage a total of €1.5 trillion in assets, making it a formidable player in the European asset management sector. This strategic partnership is designed to ensure that AXA retains full authority over product design, asset allocation, and asset-liability management decisions, while benefiting from BNP Paribas’s extensive asset management expertise.

“AXA Investment Managers has been a homegrown success story for the AXA Group. Over the past 25 years, we have built an exceptional franchise anchored in investment expertise, a relentless client focus and a proven track record on sustainability and private assets. Thanks to the quality of its teams, AXA IM is today a leading player, notably in Alternatives. In the context of a rapidly consolidating and highly competitive asset management industry, the Group has considered different options to support the future development of AXA IM and to best align with the strategic goals of AXA to further simplify its business profile and grow its insurance businesses.

By joining forces with BNP Paribas, AXA IM would become a global asset manager with a wider product offering and a mutual objective to further their leading position in responsible investing. This long-term partnership would provide AXA and its customers with continued access to a wide range of best-in-class investment solutions that would further strengthen our strategic ambitions in Life & Savings. I would like to thank all AXA IM employees for their unwavering commitment, and their continued focus on delivering value for our clients.” said Thomas Buberl, Chief Executive Officer of AXA

Impact on business operations

The acquisition underscores AXA’s strategy to simplify its business model and focus on its core insurance activities, specifically property and casualty, life and savings, and health. By exiting the asset management business, AXA aims to streamline its operations and concentrate on areas where it has a competitive advantage.

On the other hand, BNP Paribas stands to gain significantly from this acquisition, as it will enhance its asset management capabilities and expand its market reach. The deal is expected to have a CET1 impact of approximately 25 basis points for BNP Paribas, with an anticipated return on invested capital of over 18% by the third year following the integration process.

“I would like to extend a warm welcome to AXA IM teams who would join BNP Paribas as part of the completion of the project. In line with the model developed by AXA IM, BNP Paribas will remain deeply committed to deploying this new enlarged long-term savings management platform to serve insurers, pension funds as well as bank and distribution networks.” said Jean-Laurent Bonnafé, Director and CEO, BNP Paribas

Expected financial impacts of the transaction

• Starting from FY24, AXA IM will be classified as ‘discontinued operations’ in AXA’s consolidated financial statements. AXA will continue to account for the contribution of AXA IM in the Group’s underlying earnings until the expected completion of the sale.
• Upon completion, the proposed transaction is expected to result in (i) a reduction in underlying earnings of ca. Euro 0.4 billion on an annualised basis for the Group and (ii) an estimated one-off net income gain of Euro 2.2 billion.
• AXA intends to offset the earnings dilution from the proposed disposal with a share buyback, currently estimated at Euro 3.8 billion, to be launched immediately following the closing of the proposed transaction.
• The proposed transaction and the associated share buyback are expected to have a neutral impact on AXA’s Solvency II ratio.
• The proposed transaction is expected to have no material impact on the key financial targets2 that were communicated as part of the ‘Unlock the Future’ plan.

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