According to bankers, BNP Paribas’ negotiations to acquire insurer AXA’s investment division will lead to more transactions as European money managers try to fend off American competitors and as investors seek more affordable, technology-driven investing options. With approximately 1.5 trillion euros in assets, the French bank said on Thursday that it was in exclusive talks to acquire AXA Investment Managers for over 5 billion euros ($5.5 billion). This would make the bank one of the largest fund groups in Europe.
According to three people with direct knowledge of the transaction, the agreement was reached following a weeks-long bidding war between BNP and competitors, which included American firms and Amundi, the largest asset manager in the region.
In response to bigger American competitors like BlackRock, Vanguard, and Wall Street banks’ fund divisions, like JPMorgan and Goldman Sachs, many of which wish to grow in Europe, fund managers in Europe feel pressure to bolster their operations.
The large U.S. funds have an advantage in an industry that used to be dominated by highly compensated star managers but has since changed to become cost-conscious by spreading their investments over a typical range of stocks, bonds, and other securities.
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