(Bloomberg) -- Amundi SA, Europe’s largest asset manager, has emerged as the leading bidder for Societe Generale SA’s Lyxor fund management arm, people familiar with the process said.
The Paris-based firm has pulled ahead of rival suitors including State Street Corp., according to the people, who asked not to be identified because the information is private.
Amundi is now in advanced negotiations on terms of an agreement to acquire Lyxor and aims to reach a deal as soon as the next couple of weeks, the people added. Amundi has been discussing a purchase price of more than 600 million euros ($704 million), one of the people said.
Shares in Societe Generale were up 1.2% at 11:06 a.m. in Paris trading, while Amundi’s rose 2.86%.
Lyxor is one of Europe’s largest providers of exchange-traded funds and manages about 164.4 billion euros of assets, according to its website. Amundi, whose majority shareholder is French lender Credit Agricole SA, had about 1.7 trillion euros under management at the end of December.
Capital Buffers
The transaction would add to a series of disposals by Societe Generale Chief Executive Officer Frederic Oudea, who’s been trying to shore up the bank’s capital buffers and boost profitability. In recent years, the bank has divested its Nordic leasing operations as well as its Belgian private bank.
Selling Lyxor would boost Societe Generale’s ability to return capital to shareholders, with the bank vowing to resume payouts even after its worst year in decades. Societe Generale recorded its first loss-making year in more than three decades in 2020 after a slump in trading revenue.
A sale would also accelerate an exit from the asset management sector, even as money managers enjoy higher valuations than banks. At 0.31, Societe Generale’s price-to-book ratio is about half those of its French peers.
For Amundi, the combination would boost its market share in European exchange-traded products from 6.1% to 13.8% and see it become the second-biggest provider in the region behind BlackRock Inc., according to Bloomberg data. A deal would add to the legacy of Chief Executive Officer Yves Perrier, who is set to step down in May after more than a decade at the helm.
Amundi already has a partnership with Societe Generale, which distributes its investment products through its retail branch network.
No final agreements have been reached, and talks could drag on longer or another winner could emerge, the people said. Representatives for Amundi, Societe Generale and State Street declined to comment.
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