The Takeover of AXA IM by BNP Paribas from an ETF Point of View

On August 1, 2024, BNP Paribas and AXA announced that they entered into exclusive negotiations for the acquisition of AXA Investment Management (AXA IM) and a long-term partnership in asset management. Under the terms of the proposed transaction, AXA will receive overall cash proceeds of €5.4 billion. In addition, AXA and BNP Paribas would also enter into a long-term strategic partnership under which BNP Paribas would provide investment management services to AXA. The signing of the proposed transaction is expected by the end of the year, while the closing of the transaction is expected for mid-2025 after regulatory approval is obtained.

From a European fund industry perspective, the combination of BNP Paribas (€263.5 bn) and AXA IM (€193.7 bn) would have created the fifth largest promoter of mutual funds and ETFs in Europe at the end of June 2024 since the combined assets under management in mutual funds and ETFs of the two asset managers stood at €457.2 bn at June 30, 2024. Obviously, the assets under management are a subject of change, especially during a corporate action, since investors don’t want to buy funds or ETFs from a promoter which is undergoing massive structural changes in its asset management team.

From a European ETF industry point of view, this transaction means that AXA IM sells its ETF business the second time to BNP Paribas, since the two French promoters launched Easy ETF as an ETF joint venture in 2005. In 2009, AXA sold its stake in Easy ETF to BNP Paribas. After an absence of around 13 years, AXA IM returned to the European ETF industry with a range of active ETFs in September 2022.

With regard to their product ranges, the integration of the AXA IM products into the BNP Paribas Easy ETF product range makes sense since AXA IM runs only active ETFs, while BNP Paribas offers passive products. This means the two product ranges will have no overlaps for the offered strategies, which is quite rare for such a corporate action.

Generally speaking, if the takeover of AXA IM by BNP Paribas would have happened on June 30, 2024, the merger would have created the eighth largest ETF promoter in Europe with €29.9 bn in assets under management.

Graph 1: Market Share of the Assets Under Management by Product Type (June 30, 2024)

Source: LSEG Lipper

That said, the product mix of the new BNP Paribas will change after the merger, since ETFs (€

27.8 bn) account currently for 10.54% of the overall assets under management of BNP Paribas, while these products only account for 1.10% (€2.1 bn) of the assets under management of AXA IM. As a result, ETFs will account for €29.9 bn, or 6.54%, of the assets under management of the newly formed fund promoter. Nevertheless, it is to be expected that the lower market share of the assets under management in ETFs will not lead to a change in the overall product strategy of BNP Paribas after the merger.

More generally, the merger of the two French fund promoters shows that the European ETF industry can be impacted by corporate actions at the promoter parent level. With regard to this, it can be concluded that this merger is not a sign for an ongoing consolidation in the European ETF industry.

All data as of June 30, 2024

This article is for information purposes only and does not constitute any investment advice.

The views expressed are the views of the author, not necessarily those of Lipper or LSEG.