Generali deals with Natixis for more time and zero penalties

More time and away with penalties. Generali has reportedly resumed dialogue with Natixis in recent weeks on the maxi alliance in asset management. Part of the group's top management has in fact flown to Paris, on at least a couple of occasions, to try to reknit the thread of the discussion. And it would be doing so with two clear priorities: on the one hand, to extend the deadline for defining the agreement and, on the other, to take the penalty issue off the table if the negotiations fail.

The need to revise the timetable for defining the possible partnership would be linked to the developments, in terms of M&A, of the last few months. Following the Generali shareholders' meeting in April, when Mediobanca announced its offer to take over Banca Generali by offering its stake in the Lion of Trieste, the company had made it clear that it would deal with one dossier at a time. And specifically, it had made it clear that the urgency was to initiate procedures to understand whether it was in the group's interest to enhance the subsidiary's value. The attention of the top management, in recent months, has therefore been mainly focused on understanding the contours of Piazzetta Cuccia's proposal and, at the same time, assessing how to manage the operation also on the industrial front in order to maintain a link with Banca Generali. With the Mediobanca meeting of 21 August, which decreed the end of the offer, priorities changed again. And so in September the company would return to Paris. But the weeks of delay accumulated on the negotiating front would now impose a substantial change in the initially planned timetable. Hence the need to agree new deadlines.

Similarly, another central issue to be resolved is the penalty question. Although the Memorandum of Understanding (MOU) signed on 21 January by Generali with the French Natixis to set up the joint venture was not binding, a penalty of EUR 50 million was nevertheless envisaged should the agreements not go ahead. A significant amount, and one that required, among other things, that a series of technical steps be respected. These included, above all, the fact that by 31 July the respective trade unions had to give the go-ahead. This was indeed done, just as other binding commitments were to be completed by the deadline. On paper, therefore, the break-up fee, as it was intended, could be removed. It will, however, require the consent of both parties. It has to be said that by removing that element from the negotiating table, the path could turn out to be downhill for both the Italian and the transalpine sides should they wish to take a step back from the agreement.

In this regard, it should be recalled that the new company would bring together the asset management activities headed respectively by Generali Investments Holding and Natixis IM, leading to the creation of a global operator with 1.9 trillion in assets under management, the ninth largest in the world and the leader in asset management in Europe with 4.1 billion in revenues. The company resulting from the aggregation would be controlled jointly by the two financial institutions - each with a 50% share - operating with a joint governance structure and according to equal representation and control criteria. Generali Investments Holding would contribute over 0.6 trillion in assets, while Bpce's contribution, through Natixis, would be 1.3 trillion.

This is therefore the starting point around which the agreement should be defined, which, as we know, since it was unveiled has never received the approval of the Leone's large private shareholders, from the Caltagirone group to the Del Vecchio family's Delfin. UniCredit itself, on the occasion of the shareholders' meeting in Trieste, had expressed itself in very critical tones on the joint venture.