UniCredit will start exclusive talks with Banco Santander to combine its Pioneer Global Asset Management with the Spanish lender’s fund business, UniCredit CEO Federico Ghizzoni said.
UniCredit and Santander plan to merge their money management divisions and will each keep one-third of the new entity, Mr. Ghizzoni told reporters Tuesday. Warburg Pincus and General Atlantic, the two U.S. buyout firms that already own part of Santander’s unit, will own the rest.
“We decided to prefer an industrial partner for Pioneer to create one of the 15 largest asset management firms in Europe,” Mr. Ghizzoni said. “Santander’s unit is perfectly fitting with Pioneer both geographically and in terms of business.” Mr. Ghizzoni expects that the deal can be signed by November.
UniCredit, Italy’s biggest bank, is selling assets, cutting costs and reducing risk as part of a plan targeting €2 billion ($2.6 billion) of net income this year.
The sale might value Pioneer from €2 billion to €3 billion, according to people familiar with the transaction. The company, to be named Pioneer and based in London, might later merge with a money manager in Asia or the U.S., said one of the people, adding that UniCredit will receive stock and some cash as part of the transaction. Mr. Ghizzoni declined to comment on the value of the deal.
CVC Credit Partners European Opportunities and Advent International submitted lower bids, Mr. Ghizzoni said.
Pioneer had assets under management of €186 billion at the end of June, with 2,076 employees in 27 countries. Santander sold half of its money management division, which oversees more than €160 billion, to Warburg Pincus and General Atlantic last year.
Mr. Ghizzoni said the plan is for the company to hold an initial public offering in coming years.
A spokesman for Santander, Spain’s biggest bank, declined to comment, as did Warburg Pincus spokeman Ed Trissel and General Atlantic spokeswoman Jenny Farrelly.