BNP Paribas to acquire AXA’s fund business for $5.5bn

French banking group BNP Paribas is in exclusive talks with insurer AXA to acquire AXA Investment Managers, in a deal worth €5.1 billion ($5.5 billion).

The deal value is equal to 15 times the 2023 earnings of AXA’s investment business, according to an AXA statement.

As part of the deal, BNP will also be acquiring AXA’s fund services business, Select, for €300 million ($384 million) in a paired sale, the two groups said.

AXA’s investment arm has €850 billion ($1.08 trillion) in assets under management (AUM) and the acquisition would result in BNP Paribas forming a €1.5 trillion (1.92 trillion) asset management arm.

The combined entity would also be EUROPE’s second largest asset manager, behind Amundi which manages assets of €2.2 trillion ($2.80 trillion).

The two sides have also agreed on a long-term partnership under which BNP Paribas would  provide investment services to AXA once the transaction is completed.

The deal comes after a bidding battle with European rival Amundi and US buyout funds like BlackRock and Vanguard and Wall Street majors like J P Morgan and Goldman Sachs.

The acquisition will help BNP Paribas attain critical mass in alternative assets needed to cater to a customers like insurers, pension funds, banking networks and distributors, according to CEO Jean-Laurent Bonnafe.

The transaction is intended to consolidate fund business in Europe in a highly competitive environment, AXA CEO Thomas Buberl said

The sale is, expected to close in mid-2025, subject to regulatory approvals.