China's ICBC considers bid for Unicredit's Pioneer fund arm: source

HONG KONG Wed Apr 2, 2014 6:10am EDT

An employee speaks on the phone in the headquarters of Industrial and Commercial Bank of China Ltd (ICBC) in Beijing, October 15, 2013. REUTERS/Jason Lee/Files

An employee speaks on the phone in the headquarters of Industrial and Commercial Bank of China Ltd (ICBC) in Beijing, October 15, 2013.

Credit: Reuters/Jason Lee/Files

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HONG KONG (Reuters) - Industrial and Commercial Bank of China Ltd (ICBC) is considering a bid for Pioneer Investments, one of Europe's biggest money managers, according to a person familiar with the matter.

Pioneer, owned by Italy's biggest bank by assets Unicredit, managed 174 billion euros ($240 billion) as of the end of last year.

British newspaper The Sunday Times previously reported that ICBC could pay as much as 2 billion euros ($2.76 billion) for Pioneer. Such as deal would mark the biggest-ever acquisition of a Western money manager by an Asian company.

There is more urgency for Chinese banks to accelerate global growth in response to a slowing market at home and as the country's leadership change precipitates more financial sector reforms, further pressuring margins.

The global ambitions also come at a time when European banks are retreating from the asset management business in a bid to repair crisis-battered balance sheets.

"It would be a very significant development because it clearly would make a big difference to their (ICBC) credentials," said Stewart Aldcroft, a senior advisor in Asia Pacific for Citi Securities and Fund Services.

Media reports have indicated that Unicredit plans to list or sell Pioneer, which operates in 27 countries including India and Singapore. The bank declined to comment on those reports earlier this month.

Unicredit declined to comment on ICBC's interest.

In an emailed statement, an ICBC spokesman denied that it was in talks with Pioneer.

ICBC, the world's largest bank by market value, has not made a formal offer but has communicated its interest to the asset manager, the person said, declining to be identified.

The Chinese bank bought 80 percent of Standard Bank Argentina SA from Standard Bank London Holdings Plc for an estimated $600 million in cash in 2011.

The bank also formed a fund management joint venture with Credit Suisse Group AG in 2005.

UniCredit, meanwhile, has been seeking to downsize amid record financial losses and a restructuring plan aimed at streamlining it.

The Milan-based lender had tried to sell Pioneer four years ago, but abandoned that plan shortly after Federico Ghizzoni took over as chief executive in 2010.

Several European banks, including Lloyds, Santander and Societe Generale, have sold their asset management businesses over the past year.

(Additional reporting by Stephen Jewkes and Gianluca Semeraro in MILAN; Editing by Michael Flaherty and Ryan Woo)

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