Generali accelerates on Natixis, agreement before plan

Generali is trying to accelerate on the asset management dossier. According to Bloomberg, the insurance group is aiming to conclude a preliminary agreement with Natixis within the next eight weeks, i.e. immediately before the presentation of its new business plan scheduled for 30 January. Bloomberg's sources add, however, that it is not a foregone conclusion that the agreement can be reached within the timeframe now estimated.

The objective, as is well known, is to unite the asset management activities of the two entities in order to create a large European operator. In the wake, moreover, of the overall reorganisation that is affecting the sector with Allianz at the table with Amundi for Allianz Global Investors and downstream of the axis between Bnp Paribas and Axa. A wave of transactions that highlights, beyond the new strategic trend, how the great asset portfolios of the Old Continent are on the verge of becoming predominantly French-driven. In fact, Generali and Natixis would give birth to a reality of just under EUR 2 trillion in assets, while Amundi and Agi would give birth to a reality of EUR 2.5 trillion. In all, almost EUR 4,500 billion would change 'master', albeit to different degrees.

With respect to the terms of the agreement between the Lion and the transalpine operator, the plan, as reported by Il Sole 24 Ore, would be to create a new company into which the EUR 650 billion (USD 688 billion) of assets currently managed by Generali Investments Holding and the EUR 1.2 trillion (USD 1.3 trillion) held by Natixis Investment Managers would be merged.

With regard to the structure of the new entity, Generali Investments Holdings and Natixis would each hold 50% of the potential joint venture, and each company would continue to retain full ownership of the assets it would transfer to the newco. It should be recalled, in this regard, that Gih, with the Conning transaction ($117 billion in assets), has a shareholding structure in which Cathay Life is a 16.75% shareholder. Which, in transparency, would mean a direct 42% of the future JV being held by Generali and the other 8% by the partner. Among the objectives of the new transaction would also be the desire to achieve cost savings through economies of scale. The first managing director could instead be the ceo of Generali Investments Holding, namely Woody Bradford. The governance currently under consideration envisages that Trieste will first define the leadership of the partnership, which should remain in the hands of the Italian company for the next three to five years. Then the alternation would be triggered.

Amundi and Allianz, on the other hand, would not yet have clearly defined the path to conclude the deal. The German giant might decide to sell Agi in its entirety or it might still consider keeping a significant stake in the company that will emerge from the merger.