UniCredit sells Pioneer to Amundi for more than $4.2 billion: source

MILAN (Reuters) - Italy's biggest bank by assets UniCredit CRDI.MI has reached a deal to sell its asset manager Pioneer to France's Amundi for more than 4 billion euros ($4.2 billion), a source with knowledge of the matter said on Sunday.

The headquarters of UniCredit bank in Milan, Italy, February 8, 2016. REUTERS/Stefano Rellandini

The deal, which the source said involves a special dividend of about 500 million euros to be paid to UniCredit, is one of various disposals being pursued by newly-appointed Chief Executive Jean-Pierre Mustier to boost capital levels at the Italian lender, slim it down and make it easier to manage.

The Pioneer sale comes as UniCredit is set to announce on Tuesday a share issue worth up to 13 billion euros in what would be a major test of confidence in Italy’s wider banking system.

A statement confirming the Pioneer deal is expected on Monday, sources said.

Amundi in Italy and UniCredit declined to comment.

UniCredit, which operates in 17 countries and is the only Italian bank whose health is deemed important to the stability of the global financial system, needs to strengthen its balance sheet to meet tough new regulations designed for such lenders.

Only on Thursday, UniCredit announced deals to sell a 33 percent stake in Polish lender Pekao, raising more than 2.5 billion euros, while in October it sold 20 percent of its online broker FinecoBank for about 550 million euros.

Amundi, which was advised by Mediobanca on the Pioneer deal, has been in exclusive talks with UniCredit after beating rival bids presented by a consortium led by Italy's Poste Italiane PST.MI and another one by Ameriprise Financial AMP.N.

Sources have said Amundi’s bid was the highest and the French asset manager offered the best contract to distribute Pioneer’s financial products.

Pioneer is Europe’s sixth-largest asset manager with assets under management of around 225 billion euros. As investors around the world search for higher returns, asset managers have grown rapidly in recent years, making them an appealing target for banks and financial institutions.

To finance the Pioneer acquisition, Amundi plans to sell new shares for up to 2 billion euros, the Financial Times reported on Friday, citing unnamed sources.

Writing by Agnieszka Flak; Editing by Silvia Aloisi and David Clarke