By Giovanni Legorano
MILAN-- UniCredit SpA Chief Executive Federico Ghizzoni said
Tuesday the bank has decided to enter exclusive talks with Banco
Santander SA to combine its Pioneer Investments asset-management
unit with Santander Asset Management.
Mr. Ghizzoni said the combined entity resulting from the
potential deal would basically "be a merger" between the two asset
managers. He said he expects an agreement to be signed by the end
of November.
"The two companies can be perfectly integrated with important
potential synergies," said Mr. Ghizzoni. "Few can say they have
21,000 branches."
The plan, which was reported earlier Tuesday by The Wall Street
Journal, would see the creation of one of Europe's top 15 assets
managers, with 350 billion euros ($449.7 billion) in assets under
management. Both asset managers can count on a large so-called
captive client base, which means clients buying the asset managers'
products in the two banks' branches.
UniCredit and Banco Santander would own one-third each of the
combined entity. Private-equity funds Warburg Pincus and General
Atlantic together would also own one-third of the new company.
In the future, Mr. Ghizzoni said the two private-equity funds
would likely sell their stake via an initial public offering of
their shares.
Like some asset sales that UniCredit has completed this year,
the deal with Banco Santander would allow it to boost its capital
base in view of the results of a financial health check European
authorities are carrying out on the eurozone largest lenders. "We
expect an impact on capital of 20-25 basis points," Mr. Ghizzoni
said.
Mr. Ghizzoni declined to give details on the financial terms of
the offer received by Banco Santander, but a person familiar with
the matter said that the Spanish bank's offer valued Pioneer at
between EUR2.7 billion and EUR3 billion. It would also include a
cash payment by Banco Santander and the two private-equity funds to
UniCredit, the person added.
Other bidders for Pioneer were private-equity funds CVC Capital
Partners partnering with Singaporean sovereign-wealth fund GIC and
Advent International.
Those funds made binding offers expiring Wednesday to buy a 50%
stake in Pioneer, valuing the asset manager in the same range as
Banco Santander's bid.
Mr. Ghizzoni said Banco Santander's offer was higher in terms of
price.
Write to Giovanni Legorano at giovanni.legorano@wsj.com
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