UPDATE 1-Spain's Sabadell sells asset management unit to Amundi for 430 mln euros

(Adds details from joint statement)

MADRID, Jan 21 (Reuters) - Spain’s Banco de Sabadell has agreed to sell its asset management arm to French asset manager Amundi SA for 430 million euros ($477 million), the companies said on Tuesday.

The sale, which is set to close in the third quarter of 2020, will generate net capital gains of 351 million euros for Sabadell and boost its common equity tier 1 ratio (CET-1) by 43 basis points, according to the statement.

The unit has assets under management of around 21.8 billion euros, excluding third-party funds.

The deal will be financed through the existing cash of the French asset management company, the statement added.

Amundi, Europe’s biggest asset manager, has been present in Spain since 2002 through its Amundi Iberia subsidiary.

The units of Sabadell Asset Management and Amundi Iberia will remain separate legal entities, the companies said, citing the need to preserve their operations of investment funds and pension plans.

Amundi has grown through sizeable deals in the past, including the purchase of UniCredit’s asset management unit Pioneer Investments, which it bought for 3.6 billion euros in 2016.

Commenting on the deal, brokerage Jefferies said the price was lower than expected.

“We note the price is materially less than the 700 million euros that was posited back in October,” Jefferies said in a note.

$1 = 0.9018 euros Reporting by Nathan Allen in Madrid and Kanishka Singh in Bengaluru; editing by Jesús Aguado and Rosalba O’Brien