By Elena Vardon

Italy's Generali and the owner of France's Natixis Investment Managers agreed to jointly create a European asset manager overlooking 1.9 trillion euros ($1.979 trillion).

The Italian insurer and French retail bank Groupe BPCE signed a preliminary deal to form a new entity in which they will each own a 50% of the business with balanced governance and control rights, they said in a joint statement Tuesday.

Generali operates asset management activities through its Generali Investments arm, recently bolstered with the acquisition of Connecticut-based Conning Holdings, which serves U.S. and Asian clients. Natixis has a network of fund boutiques including Harris Associates and Loomis Sayles in the U.S.

The joint venture will be headed by the chief executive of Generali's investment division Woody Bradford--who joined the Italian insurer through the Conning deal--while BPCE's CEO Nicolas Namias will take the chairman role.

The transaction is set to close by early 2026, subject to approvals.

Over 2026 and 2027, BPCE will get preferred dividend rights while Generali will benefit from repayment tranches of a loan linked to its recent acquisition of U.S. private direct-lending investment firm MGG, they said.

The news confirm recent media reports of a tie-up between the two groups as consolidation in the sector heats up with financial services companies seeking to reinforce their fee-generating activities through deals and partnerships as central banks trim interest rates.

Last year, BNP Paribas announced the acquisition of AXA Investment Managers from the French insurer for 5.1 billion euros while Italy's Banco BPM launched a 1.6 billion euro takeover bid for Anima Holding. Talks of a potential transaction between German insurer Allianz and Amundi, the French asset manager which is majority owned by Credit Agricole, have also been reported.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

January 21, 2025 02:01 ET (07:01 GMT)

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