Amundi's Vision for Pioneer
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Tuesday, December 13, 2016

Amundi's Vision for Pioneer

Amundi's CEO Yves Perrier has high expectations for his latest purchase, but there are still several lingering questions about the future of Pioneer.

Yves Perrier
From a financial perspective, Amundi expects a 10 percent ROI within three years and says that shareholders will see a 30 percent boost to EPS.

A key distribution benefit the Amundi folks see is an overall shift in assets towards the higher-margin retail sector. When it comes to split by channel, the two firms complement each other almost perfectly. Amundi's assets are 73 percent institutional and 27 percent retail, while Pioneer's are 26 percent institutional and 74 percent retail. The combined company will have 35 percent of its assets in the retail channel, marking a significant increase for Amundi.

But questions about the fate of Pioneer remain. Amundi plans to have an integration plan finalized by the time the deal closes within the first half of 2017. Integration roll-out will begin in the second half of 2017, and the companies will be fully integrated by 2018.

However, since the details of the plan haven't been hashed out, there's no way to know exactly what a full integration will look like. Amundi plans to integrate the executive teams "by identifying complementary skills and retaining key senior people." Pioneer CEO Giordano Lombardo will be part of outlining the structure of the combined organization. (Lisa Jones is the CEO of Pioneer's U.S. division.)

Cost synergies provide another clue into what might be in store. Amundi expects that the deal will provide 150 million euros ($159 million) in pre-tax run-rate cost synergies, and expects that these savings will be the result of "merging investment platforms, streamlining IT services and rationalizing administrative and back-office costs."

One question that's still completely up in the air: what will happen to the Pioneer brand? A spokesperson for Amundi tells MFWire that nothing has yet been decided, and it's still too early to know.

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