The mutual fund arms of state-run lender Bank of Baroda and the India unit of French financial services group BNP Paribas have agreed to merge through an all-stock deal.
Baroda Asset Management India Ltd will merge with BNP Paribas Asset Management India Pvt. Ltd while Baroda Trustee India Pvt. Ltd will combine with BNP Paribas Trustee India Pvt. Ltd, according to a stock-exchange filing.
After the transaction closes, Bank of Baroda will have a stake of 50.1% in the combined asset management company and a 50.7% stake in the combined trustee while BNP Paribas will hold the remaining.
The transaction is subject to regulatory clearances and other legal approvals.
“This joint venture will allow us to create a stronger, more competitive asset management company… with the large distribution network of Bank of Baroda and the expertise of BNP Paribas coupled with the benefit of the firm’s ability to source offshore funds,” PS Jayakumar, managing director and CEO, Bank of Baroda, said in a separate statement.
Ligia Torres, Asia Pacific CEO at BNP Paribas Asset Management, said that the transaction reinforces its footprint in India and Asia Pacific and that this will enable it to offer products and services to a much larger investor base.
Baroda AMC had average assets under management (AAUM) Rs 11,319.69 crore for the quarter ended March 31, 2019 while BNP Paribas AMC had AAUM of Rs 10,072.60 crore.
The total income of Baroda AMC was Rs 50.19 crore for 2018-19 and that of BNP Paribas AMC was Rs 96.12 crore.
Bank of Baroda is being assisted by BOB Capital Markets Ltd as its transaction adviser, Khaitan & Co as its legal adviser and Deloitte Touche Tohmatsu India LLP as its financial due-diligence adviser.
BNP Paribas Asset Management is being assisted by BNP Paribas Investment Banking as its transaction adviser, AZB & Partners as its legal adviser and PricewaterhouseCoopers Pvt. Ltd as its financial due-diligence adviser.