Banco Santander SA in Talks to Buy Back 50% Stake in Asset Management Unit
November 02 2016 - 4:10PM
Dow Jones News
Banco Santander SA is in talks to buy back the 50% stake in its
asset-management unit that it sold to two private-equity firms in
2013, according to people familiar with the situation.
Santander sold half of Santander Asset Management to Warburg
Pincus LLC and General Atlantic 3½ years ago in a transaction that
valued the unit at €2 billion ($2.2 billion). The deal generated a
net capital gain of €700 million for Santander, the Spanish bank
said at the time. The asset-management unit had €173.6 billion of
assets under management as of June 30 and more than 700 staff,
mostly in Europe and South America.
The two U.S. private-equity firms are discussing the sale of
their stake in Santander Asset Management, following a decision in
July by Santander and Italy's UniCredit SpA to end a plan to merge
their asset-management units.
When the merger with UniCredit's Pioneer Investments unit was
announced in 2015, Santander said the deal valued its
asset-management unit at €2.6 billion. The combination with Pioneer
would have created a firm with a €353 billion under management.
In scrapping the deal, UniCredit said regulatory issues made it
impossible to find a "workable solution within a reasonable time
horizon."
Santander Asset Management was among billions of dollars of
assets that private-equity firms acquired from banks as lenders
sought to raise cash in the wake of the global financial crisis.
General Atlantic and Warburg Pincus have worked together on other
transactions, including last year's acquisition of a 49% stake in
Dubai-based payments-processing company Network International.
In the past couple of years, European banks have stepped up
their focus on selling asset-management products, which generate
fees and commissions that have helped to boost profitability as
lenders cope with rock-bottom interest rates and sluggish demand
for loans.
Santander Chief Executive José Antonio Á lvarez said the merger
with Pioneer would have allowed the lenders' asset managers to
offer a wider range of products.
Write to Simon Clark at simon.clark@wsj.com and Jeannette
Neumann at jeannette.neumann@wsj.com
(END) Dow Jones Newswires
November 02, 2016 15:55 ET (19:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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