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[PARIS] Amundi SA agreed to buy Pioneer Global Asset Management from Italy's UniCredit SpA, accelerating the French company's growth in the US and European markets including Germany and Austria.
Amundi will pay about 3.5 billion euros (S$5.29 billion) in cash, the French company said in a statement on Monday. It plans a 1.4 billion-euro capital increase to help pay for the purchase and will use about 600 million euros of senior subordinated debt as well as about 1.5 billion in existing capital.
The purchase of Pioneer, which oversees about 222 billion euros in assets, will give Amundi more than US$1.3 trillion under management, which the company says will make it the world's eighth-largest asset manager. Chief Executive Officer Yves Perrier has said he wants to be a European competitor to US giants like BlackRock Inc, the firm Larry Fink built into the world's biggest money manager.
"Amundi is moving up another notch in the global rankings," said Alexandre Blondel, a Paris-based director specializing in financial services at business adviser Equinox-Cognizant. Pioneer's presence is "significant in the US," and should provide Amundi with distribution access to UniCredit's retail clients in Europe, he said.
Pioneer draws its origins from one of the oldest US mutual funds, created in 1928 by Philip Carret, a financial reporter at business weekly Barron's. In the 1960s, Pioneer was among the first American funds to start doing business in Italy and Germany. It has a staff of more than 2,000 people, with a presence in 28 countries and global hubs in Boston, Dublin and London. North America represents 18 per cent of Pioneer's assets under management, compared to less than 3 per cent at Amundi.
For Milan-based UniCredit, the disposal of Pioneer after 16 years of ownership is a key piece of its efforts to bolster capital and restore investor confidence. Amundi is a unit of French lender Credit Agricole SA.
For UniCredit, the deal is another disposal that helps the bank boost its capital ahead of the release of its strategic plan later this month. Last week it agreed to sell a stake in Bank Pekao SA of Poland. Two state controlled Polish companies bought a 32.8 per cent stake for about US$2.6 billion and it sold the remaining 7.3 per cent stake on the market.
The selloffs under new Chief Executive Officer Jean Pierre Mustier come after Italy's biggest bank by assets emerged from the latest European stress tests with the slimmest capital margin among those deemed important to the financial system.
Amundi, created in 2010 when Credit Agricole and Societe Generale SA combined their asset-management businesses, went public last year to fund its international expansion as Societe Generale sold its stake.