UniCredit, Santander Terminate Asset Management Units Merger -- Update

By Deborah Ball 

MILAN-- UniCredit SpA said Wednesday that it has agreed with Spain's Banco Santander SA to terminate an agreement struck last year to merge its asset management units.

The Italian bank said that due to regulatory problems, it was impossible to find a "workable solution within a reasonable time horizon."

Last year, UniCredit and Santander reached a preliminary agreement to merge its asset-management unit Pioneer with that of the Spanish bank.

In Wednesday's statement, UniCredit said that it may now consider an initial public offering of Pioneer.

The deal was meant to create a new group, boasting an enterprise value of around EUR5.5 billion ($6 billion) and EUR400 billion in assets under management. It was also meant to help UniCredit reduce head count, a key goal in a bank that in the midst of a sweeping cost-cutting campaign.

Jean Pierre Mustier, UniCredit's new chief executive, will present a new strategic plan by year's end aimed at improving the bank's profitability.

Santander Chief Executive José Antonio Álvarez said Wednesday during an earnings presentation that the deal would have provided scale to the lenders' asset managers and allowed them to offer a wider range of products to clients. Now that the deal has fallen through, he said, Santander will focus on improving its offering for clients.

Write to Deborah Ball at [e-mail]

(END) Dow Jones Newswires

July 27, 2016 07:46 ET (11:46 GMT)

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