In a related move, AXA also closed the sale of Select to AXA IM for €0.3 billion, bringing the total transaction value to €5.4 billion, in line with earlier announcements.
As part of the deal, AXA and BNP Paribas have entered a long-term partnership under which the French banking group will provide investment management services to AXA. AXA will continue to oversee product design, asset allocation and asset-liability management.
The combined entity formed through the integration of AXA IM into BNP Paribas now manages €1.5 trillion in assets.
Thomas Buberl (pictured above), AXA’s chief executive officer, said the transaction marks a new phase for AXA IM.
“The combination with BNP Paribas positions AXA IM for future success by leveraging their combined strengths and capabilities. We look forward to the partnership with BNP Paribas to continue to deliver best-in-class investment solutions for AXA and its clients,” Buberl said.
He also acknowledged the contributions of AXA IM employees over the past 25 years to the business’s development.
The transaction is expected to produce a one-off net income gain of approximately €2.2 billion for AXA. However, the Group anticipates an annualised reduction of around €0.4 billion in underlying earnings.
To mitigate the impact of the earnings dilution, AXA plans to initiate a share buyback programme of up to €3.8 billion. The launch will depend on market conditions and is expected to proceed as soon as practicable. AXA indicated that additional information will be provided in due course.
Meanwhile, BNP Paribas has adjusted its expected financial return from the transaction, revising its target for return on invested capital to over 14% in the third year following the deal’s completion. This represents a decrease from the originally projected 18%, reflecting updated estimates tied to capital treatment under banking regulations.
The revision also accounts for the expected impact on BNP Paribas’s capital base, including a potential 35 basis point decrease in its Common Equity Tier 1 (CET1) ratio.
The acquisition also strengthens BNP Paribas’s strategy to expand in private markets. AXA IM brings a portfolio of private asset capabilities, including infrastructure, real estate, and private debt, that will be integrated into BNP Paribas’s offerings.
With this acquisition, BNP Paribas also became one of the largest asset managers in Europe. The combined group will sit just behind Amundi, currently managing approximately €2.16 trillion.
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