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UniCredit to sell Pioneer to Amundi for €3.55B

UniCredit SpA will sell its asset management unit to France's Amundi SA for an all-cash consideration of €3.55 billion, marking the latest in a series of capital-generating exercises by the Italian lender.

Pioneer Global Asset Management SpA will also distribute a €315 million pre-transaction extraordinary dividend to UniCredit. The sale is expected to generate a net capital gain of €2.2 billion in 2017 for UniCredit and will boost its fully loaded common equity Tier 1 ratio by 78 basis points.

UniCredit is slated to hold an investor day Dec. 13 in London, during which it is expected to announce a cash call to further boost its capital buffers and enable it to off-load a substantive chunk of its bad loan portfolio. It agreed Dec. 8 to sell most of its remaining stake in Poland's Bank Pekao SA to a state-controlled insurer and development fund, a transaction expected to add 55 basis points to its group CET1 ratio.

Pioneer manages €222 billion in assets and has a presence in 28 countries. The acquisition will boost Amundi's AUM to €1.276 trillion, reinforcing its position as the European leader in asset management and ranking it eighth globally.

Amundi will finance the transaction with €1.5 billion of excess capital and €600 million of senior and subordinated debt, as well as a €1.4 billion rights issue to be launched in the first half of 2017 and underwritten by Crédit Agricole Group. Crédit Agricole, which owns 75% of Amundi, will support the offering and maintain its stake at no less than 66.7%.

As part of the deal, which has been approved by the boards of directors of UniCredit, Pioneer and Amundi, UniCredit and Amundi will form a long-term asset management distribution strategic partnership, to include a 10-year distribution agreement in Italy, Germany and Austria.

The deal, expected to complete in the first half of 2017, is subject to customary closing conditions, regulatory and antitrust approvals.

Crédit Agricole Group said the transaction fits with its strategy to boost its asset management activities under the Amundi business model, to reinforce organic growth in asset management through M&A and to build the group's presence in Italy. It foresees a more than 5% uplift to Crédit Agricole SA's EPS from the deal, which is expected to have a negative impact on the latter's CET1 ratio of 55 to 85 basis points.

Crédit Agricole SA's dividend policy will remain unchanged, the company noted.

Amundi's financial advisers on the deal were Goldman Sachs International, Mediobanca and Crédit Agricole CIB. Cleary Gottlieb Steen & Hamilton and Veil Jourde served as legal advisers.

J.P. Morgan, Morgan Stanley and UniCredit Corporate & Investment Banking served as UniCredit's financial advisers. Gianni Origoni Grippo Cappelli & Partners acted as legal adviser.