Europe’s largest asset manager Amundi has announced that it has entered into talks with Société Générale for the acquisition of Lyxor. The deal would be worth €825 million or €755 million excluding excess capital.
It should be noted that Lyxor has not had the best of times in recent years, reporting outflows of $7.3 billion in 2019 and also losing key members of staff.
First its head of ETF strategy Adam Laird left the company in 2019 to start his own venture and his replacement Chanchal Samadder left Lyxor this year to kickstart Aberdeen Standard Investments entry into the ETF market.
Lyxor was founded in 1998 and has €124 billion in assets under management. It was always in competition for the coveted number two position in Europe after the market dominance of BlackRock’s iShares, its closest rival being DB X-Trackers. However, after the aforementioned horror show of 2019, Lyxor found itself well and truly in third place. This is now set to change.
The deal will not come as a surprise to many who have been following the ETF market, one of main issues seemed to be how to unpack Société Générale’s involvement with both Amundi and Lyxor.
Amundi was created by merging the asset management divisions of two of France’s major banks Société Générale and Credit Agricole. Things get even more complicated when the fact that Société Générale asset management’s ETF division was transferred to Lyxor in 2009 is taken into account.
The statement released today by Amundi which includes, “thanks to this acquisition, Amundi would become the European leader in ETF" has to be taken with a large pinch of salt, if it’s referring to the cementing second place behind iShares than it is accurate. Amundi stated that it will have a 14 percent share of the European ETF market, a long way of iShares near 50 percent of the market but the largest any one firm has after the US giant.
This will also be chief executive officer Yves Perrier’s swansong, as he is stepping down in May with his deputy Valérie Baudson taking the helm. Under Mr Perrier’s stewardship, Amundi successfully listed, completed some major acquisitions including that of Italian asset manager Pioneer. This deal seems to be a fitting end to Mr Perrier’s 11 years in charge at Amundi.
He said in a statement: “The acquisition of Lyxor will accelerate the development of Amundi, as it will reinforce our expertise, namely in ETF and alternative asset management, and allows us to welcome highly recognized teams of people. This acquisition is fully in line with the Crédit Agricole group’s reinforcement strategy in the asset gathering business. It will also further reinforce the business relationships with our historical partner Société Générale.”