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Money Management

AXA said to weigh merger for European asset management unit

French insurer AXA is reviewing options for its European asset management unit amid consolidation in the sector, according to people familiar with the matter.

AXA is considering a merger or joint venture for the business, the people said, asking not to be identified because the details aren't public. Potential partners could include Natixis, the people said. Any transaction could be a precursor for an eventual initial public offering or partial sale, one of the people said.

No final decisions have been made, and AXA may choose to retain the unit as is, they said. Representatives for AXA and Natixis declined to comment.

AXA's European asset management business reported annual sales of about €1.2 billion ($1.4 billion) in 2016, a 3% decline from a year earlier. AXA Investment Managers oversaw €735 billion in assets as of the end of June, according to its website.

A majority of asset managers expect that competition from exchange-traded funds and other index strategies, as well as more complex regulation, will force consolidation in the sector, according to a State Street survey in July. British insurer

Amundi is one model for consolidation in the sector. The company was created in 2010 when Credit Agricole and Societe Generale combined their asset management businesses. Societe Generale sold its entire stake in the company when Amundi listed in Paris in November 2015. The stock has climbed about 50% since the initial public offering, data compiled by Bloomberg show.

AXA, Europe's second-largest insurer, said in May it was planning to list a minority stake in its U.S. businesses, including its U.S. life and savings unit and its 64% stake in AllianceBernstein (AB) Holding. AXA Investment Managers is present in 14 cities in Europe and covers investment strategies ranging from equities to fixed income to real estate.

AXA shares rose 0.1% to close at €24.81 in Paris trading on Thursday. Natixis gained 1.1% to €6.57.