The'very ambitious' asset management arrangement between Generali and BPCE is agreed to be executed.

According to Reuters, MILAN/PARISIn an effort to become the biggest player in Europe by revenue, Generali and BPCE of France announced on Tuesday that they had inked a non-binding memorandum of understanding (MoU) to merge their asset management businesses.


The two businesses stated that the agreement, which comes as the industry struggles with declining profit margins, competition from American behemoths, and rapidly changing technological demands, is anticipated to be finalized by early 2026.

BPCE CEO Nicolas Namias presented the "very ambitious" project at a joint press briefing with Generali (BIT:GASI) CEO Philippe Donnet. "We are convinced that the asset management industry is undergoing rapid changes with scale and size being more critical than in the past," Namias said.

The agreement provides for "balanced governance and control rights" with 50% ownership of the new company going to each of BPCE's Natixis Investment Managers and Generali Investments.

With 1.9 trillion euros in assets under management (AUMs), the new company, whose combined value was estimated by the two corporations to be around 9.5 billion euros, will rank second in Europe behind Amundi of France. It will also lead in revenue, with 4.1 billion euros.

With daily activities conducted out of Italy, France, and the United States, the new joint venture will have its headquarters in Amsterdam and Namias will serve as its chair of the board.

Woody Bradford, who currently leads Generali's asset management activities and was previously the CEO of Conning Holdings, a U.S. asset manager that serves insurers and pension funds and was recently acquired by Generali, will serve as chief executive and Donnet as vice chair.

Philippe Setbon, the CEO of Natixis IM, will serve as deputy CEO.

According to Donnet, Generali is committing slightly over 630 billion euros in AUMs to the joint, while Natixis IM is contributing almost 1.3 trillion euros.

Over a five-year period, the combined benefits are expected to total about 200 million euros. Generali has promised to contribute 15 billion euros in "seed money" to launch new investment projects over that time.

Regulatory obstacles stand in the way of the deal, particularly in Italy, where the government is eager for local savings to continue funding the refinance of its substantial public debt.

Under "golden power" legislation, which grants it influence over companies considered strategically important to the nation, Rome must seal the sale.

According to three persons familiar with the situation, Generali's 13-member board authorized the MOU on Monday, but the three board representatives of Francesco Gaetano Caltagirone, a prominent shareholder and close ally of Italy's conservative government, voted against the agreement.

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