Pioneer Santander merger in danger
The merger of Pioneer Investments and Santander Asset Management could be postponed as UniCredit’s CEO has stepped down.
In April 2015, UniCredit and Santander signed an agreement to merge UniCredit-owned Pioneer Investments and Santander Asset Management, but the deal has been reportedly postponed until a replacement is found for UniCredit’s Federico Ghizzoni.
The merger, which was previously stalled over regulatory and governance hurdles, is “currently frozen” as UniCredit’s new management will review the deal, one source told Reuters.
The source also said there is a high chance for the deal to be called off, adding there was a “queue” of alternative buyers for Pioneer.
InvestmentEurope contacted Santander Asset Management but it declined to comment. Pioneer, for its part, did not respond at the time of publication.
The deal with Santander would create one of Europe’s leading asset managers with €400bn under management, giving Pioneer an enterprise value of €2.75bn and could add 25 basis points to UniCredit’s core capital base, which is now stretched.
By end of May, shares in UniCredit had lost 43%, underperforming a 36% drop in Italian bank stocks. This prompted growing shareholder discontent over the weak share price performance of the Italian bank, stretched capital position and low profitability when compared to rivals.
After Ghizzoni agreed to step down, shares in UniCredit rose for the second day running on Wednesday, reaching €3.09 and up by 6.2% from 23 May.