04.07.2021

Amundi Enters Exclusive Negotiations To Buy Lyxor

Amundi announces that it has entered into exclusive negotiations with Société Générale for the acquisition of Lyxor for a total cash consideration of €825m, or €755m excluding excess capital.Thanks to this acquisition, Amundi would become the European leader in ETF, with €142bn combined AuM, a 14% market share in Europe and a diversified profile in terms of client base and geography.

Amundi would benefit from strong levers to accelerate its development on the fast-growing ETF segment, while complementing its offering in active management, in particular in liquid alternative assets and advisory solutions.

This acquisition is fully in line with the Crédit Agricole group’s strategy, which aims at reinforcing its position in the asset gathering businesses.

The transaction is expected to be completed by February 2022 at the latest, after consultation of the Works Councils, and subject to receiving the required regulatory and anti-trust approvals.

Founded in 1998, Lyxor is a pioneer in ETF in Europe and has a total €124bn in Assets under Management (AuM). Lyxor is one of the key players in the ETF market (€77bn of AuM, 3rd largest player in Europe with a 7.4% market share) and has developed a recognized expertise in active management (€47bn of AuM), notably through its leading alternative platform.

Source: Amundi

Societe Generale’s Board of Directors approved, during a meeting on 6 April 2021, the entry into exclusive negotiation with Amundi with a view to disposing of the asset management activities operated by Lyxor.

Lyxor is an entity which includes the Group’s asset management activities and operates in particular through Lyxor Asset Management, a wholly owned subsidiary of Societe Generale.

Created in 1998, Lyxor has played a pioneering role in specialised asset management and has notably reached leadership positions in passive asset management. Lyxor’s assets under management represent approximately EUR 140 billion at the end of December 2020 of which EUR 124 billion are in the scope of the envisaged transaction1.

This disposal project would cover Lyxor’s passive (ETFs) and active (including alternative) management activities for institutional clients in France and abroad2. The scope of the transaction would include the sales and support functions dedicated to these activities.

This agreement is in line with Societe Generale’s strategy with regards to savings, which is to operate in open architecture and to propose to its clients investment and asset management solutions through partnerships with external asset managers.

In this context, Societe Generale would announce a project to create a “Wealth & Investment Solutions” department within its private bank. This department would serve as a centre of expertise to structure savings, asset management and investment solutions for the Group’s private banking and retail banking networks, as well as structured asset management solutions for global markets clients.  It would include Lyxor’s teams, which would not be part of the disposal project.

The partnership agreements with Amundi for the provision of savings and investment solutions for Societe Generale’s networks are maintained. Societe Generale will also continue to support Amundi through its comprehensive and flexible range of market solutions and securities services.

This transaction, which is expected to be finalized by February 2022 at the latest, would be carried out at a price of EUR 825 million and would have an estimated positive impact of approximately 18 basis points on the Group’s CET1 ratio when completed. The capital gain from the disposal, net of tax, would be recorded upon completion of the transaction for around EUR 430 million.

This transaction would successfully conclude the refocusing programme launched by Societe Generale in 2018. Carried out under very good conditions, its execution will have simplified the Group’s organisation and optimised its capital allocation by focusing its business model on core activities, working in synergy and benefiting from critical size, with a positive effect of this program on the Group’s capital ratio in line with the target of 80 to 90 basis points.

The two institutions will work together to ensure the smooth integration of Lyxor within Amundi, both in terms of services provided to clients and in relations with the employees involved in this project.

This project will be submitted to the relevant employee representative bodies within Societe Generale Group, and then to the competent regulatory authorities for approval.

Frédéric Oudéa, Chief Executive Officer of Societe Generale, comments:This transaction with Amundi, Europe’s leading asset manager, which Societe Generale helped to create, will enable Lyxor’s teams to play an active role in building the undisputed leader in passive management in Europe in a consolidating market. It is fully in line with Societe Generale’s strategy in terms of savings products, which is to operate in open architecture and team up with the best asset management experts to build the most suitable offers for our clients. Societe Generale and Amundi will remain key partners, each participating mutually in the value proposition implemented for their clients. In addition, this transaction would successfully close the refocusing program launched in 2018 by Societe Generale.”

Certain activities from Lyxor are excluded from the scope of the transaction and retained by Societe Generale: (i) structured asset management solutions intended for Societe Generale’s global markets clients and (ii) asset management activities dedicated to savings solutions and carried out for Societe Generale (Branch networks and Private Banking) such as structuring of savings solutions, funds selection and the supervision of the Group’s asset management companies.

2 with the exception of Lyxor AM Japan Co. Ltd in Japan

Note : Upon completion of this transaction Societe Generale Private Banking, one of the bank’s core businesses, would become a fully-fledged Business Unit, renamed “PRIV”, integrated within the RBDF pillar and supervised by Sébastien Proto. It would be composed of four main business lines: Private Banking France, Private Banking Europe (Luxembourg, Switzerland, Monaco), Kleinwort Hambros and the Wealth and Investment Solutions department.

Source: Societe Generale

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