UPDATE 4-SocGen set to sell Lyxor to Amundi for $979 million

* Deal would complete SocGen revamp, says CEO

* Amundi says Lyxor to make it Europe’s leading ETF provider

* Amundi has no plan for forced layoffs in the deal (Adds Amundi CEO comments on forced departures and analysts comments)

PARIS, April 7 (Reuters) - Societe Generale is in exclusive talks to sell most of asset manager Lyxor to Amundi for 825 million euros ($979 million) and complete the French bank’s corporate restructuring while boosting Amundi’s scale in Europe.

Amundi, a subsidiary of Credit Agricole, said the proposed deal would make it Europe’s leader in exchange traded funds with a 14% market share.

SocGen, which will make a capital gain of around 430 million euros from the Lyxor sale, said that the deal would conclude the “refocusing programme” the bank launched in 2018.

CEO Frederic Oudea is revamping SocGen’s markets division and after losses in structured products wiped out earnings at its equities business in the first half of last year.

Amundi CEO Yves Perrier said: “The acquisition of Lyxor will accelerate the development of Amundi, as it will reinforce our expertise, namely in ETF and alternative asset management.”

Perrier told reporters Amundi had no plan for forced layoffs as part of the deal that is expected to generate 30 million euros a year in revenue synergies and 60 million euros in annual cost synergies.

“We do not plan any forced departures for implementing synergies”, Perrier said.

Lyxor, which ranks as Europe’s third-largest ETF provider, had about 82.3 billion euros of assets under management in ETFs in February, representing half of its operations.


SocGen said the sale would cover Lyxor’s ETFs and other active and alternative management activities for institutional clients in France and abroad, with SocGen retaining some Lyxor operations.

The disposal would have an estimated positive impact of approximately 18 basis points on the bank’s core Tier 1 equity ratio, SocGen said.

“This transaction makes both financial and strategic sense for SocGen”, analysts at Jefferies said.

“SocGen lacked the critical size in this business in our, and though SocGen is in excess capital we find the financial terms attractive”, they noted.

SocGen and Amundi shares were up 1.2% and 2.2% respectively at 0942 GMT, both outperforming a 0.26% gain for France’s CAC 40 blue-chip index.

Shares in SocGen, which reported a better than expected fourth-quarter profit two months ago, have gained 35% so far this year, against a 19.8% increase for the Stoxx Europe 600 Banks Index.

Reuters reported last month that SocGen was in talks with both France’s Amundi and U.S. company State Street Corp to sell Lyxor..

SocGen, due to unveil on May 10 a review of its corporate and investment banking operations, said the Lyxor sale was in line with its open architecture strategy where banks offer investment funds from several asset managers.

The bank signed last year a new five-year distribution agreement with Amundi.

In 2009, SocGen merged most of its asset management business with Credit Agricole to form Amundi which was listed in 2015 when Societe Generale sold its remaining 20% stake in the asset manager.

Amundi bought rival Pioneer Investments from Italian bank UniCredit in 2016 to expand in Europe.

($1 = 0.8424 euros)

Reporting by Benoit Van Overstraeten; Additional reporting by Matthieu Protard; Editing by Shounak Dasgupta, David Goodman and Jane Merriman