On December 31, Amundi French assets management company announced that it completed the acquisition of Lyxor from the French investment bank, Societe Generale. The assets management firm said that all the necessary regulatory and competition authorisations have been approved. In addition, the fund manager stated that it had completed transactions required for purchasing Lyxor. Amundi bought Lyxor for a total cash amount of €825 million, two months ahead of the scheduled transaction date.
Established in 1998, Lyxor is one of the major players in the ETF market in Europe and has developed recognized expertise in active management through its leading liquid alternative platform. The completed deal includes Lyxor asset management’s active and passive management activities for institutional clients in France and worldwide, including alternative products and exchange-traded funds (ETFs).
Therefore, the completion of the transaction makes Amundi become a leading European ETF group with a combined 14% market share and €142 billion in assets under management. The acquisition of Lyxor will help Amundi accelerate its development, as it will reinforce Amundi’s expertise in ETFs and alternative asset management, and it will allow the firm to welcome a highly recognized team of people.
Meanwhile, Societe Generale sold its Lyxor asset management business for €825 million as part of its ongoing cost savings strategy. The transaction has closed the refocusing programs that Societe Generale launched in 2018. Also, the bank has been making cuts to its investment banking division in order to reduce costs by around €500 million. The sale of Lyxor was in line with Societe Generale’s strategy in terms of cost-saving measures. Amundi and Societe Generale will remain key partners, with each collaborating mutually towards creating value for their clients.
Banks Move to Cut Costs and Increase Digital Investment
The development by Societe Generale selling its Lyxor business unit comes at a time when the French multinational investment bank is keen on boosting its financial performance after disappointing quarters. In the first quarter of 2020, the third largest bank in France reported a net loss of €326 million. In the second quarter, the group reported a net loss of €1.264 million. In December 2020, the bank was merging two of its French retail brands to cut costs and to enable it to focus on a single IT system. At the same time, the institution planned to invest in its digital banking offering, Boursorama, which aims to have more than four million customers by 2025.
The Covid-19 pandemic has accelerated changes in the retail banking sector. As a result, Societe Generale now focuses on investing in its Boursorama digital bank offering with the aim of making it one of the leading banks in France. Banks across Europe are making drastic measures amid challenges caused by the Covid-19 crisis and rising competition from more agile and tech-savvy challengers. Challenger banks are taking advantage of the low costs as a result of their automation of digital services. Traditional banks are trying to balance existing models with new digital banking services. This has prompted banks to embrace cost cutting measures through job cuts, branch closures, the closures of offices and increasing investment in technology.
