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Wednesday, September 24, 2014

Unicredit Pioneers a Solution

News summary by MFWire's editors

Just a month after taking over Pioneer's U.S. business, CEO Lisa Jones looks to be getting a new boss in time for Thanksgiving.

UniCredit CEO Federico Ghizzoni confirmed to reporters on Tuesday that it has entered into exclusive talks to with Banco Santander to combine the two firm's asset management arms. Ghizzoni said that a deal could be done by November and would create a top 15 asset manager in Europe. [See MFWire's living timeline of the Pioneer auction for more details and history.]

Bloomberg reports that the new business would be named Pioneer and would be based in London. Ghizzoni said that the unit will eventually be spun out in an IPO.

Earlier, there were multiple news reports that a deal led by Warburg Pincus and General Atlantic was in the works. The two private equity firms recently purchased a 50 percent share in Santander Asset Management.

UniCredit, Banco Santander and the two private equity firms would each own roughly one-third of the new venture that would be created from Pioneer Global Asset Management and Santander Asset Management, reports the Wall Street Journal.

Combined, Santander Asset Management and Pioneer Investments will have more than $400 billion of AUM. The WSJ reports that the deal is priced at between 10 and 11 times Ebitda, or 2.7 billion and 3 billion. That translates into $3.5 to $3.8 billion.

The deal will open Santander's European distribution to Pioneer's asset management products. Just 19 percent of Pioneers business is in the United States, according to the WSJ.

UniCredit, an Italian bank, is making the sale in order to raise its tier one asset ration in response to the European Central Banks increased focus on the health of European banks, reports the Financial Times.

The WSJ reported that CVC Capital Partners and GIC (Singapore's sovereign wealth fund) had made a joint, but losing bid. Advent International was also a bidder on the deal, according to Ghizzoni. 

Edited by: Sean Hanna, Editor in Chief

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