(Reuters) - UniCredit (CRDI.MI) and Santander (SAN.MC) have agreed to merge their asset management businesses in a deal where the Spanish bank will have no direct involvement in the new group’s U.S. operations, three sources close to the matter said.
The two banks said in September they were in talks to merge Santander Asset Management and UniCredit’s Pioneer business to create a top-10 European fund management group overseeing some 400 billion euros ($429.16 billion) in assets.
But a signing of the deal has been held up by its complex structure.
The deal was put together to ensure Santander had no direct involvement in the U.S. part of the business. The Spanish bank failed a regulatory health check in the United States this year for the second consecutive year.
“The agreement for the future of Pioneer has been reached and the official signature is just a matter of days, if not hours, away,” one of the sources said on Wednesday.
UniCredit, Santander and Pioneer declined to comment.
Under the deal, a holding company equally owned by UniCredit on one side and private equity funds Warburg Pincus and General Atlantic on the other will be set up to manage operations in the United States, another source said.
The two private equity funds are already partners in Santander’s asset management unit.
The new holding company will also own two-thirds of a sub-holding containing Santander Asset Management and Pioneer’s activities in the rest of the world. Santander would own the remaining third of this business, according to the sources.
“We’re still at the term sheet level, the contracts still need to be finalised,” one of the sources said, adding that completion of the deal would still take several months.
For UniCredit, Italy’s biggest bank by assets, ceding control of Pioneer is the latest in a string of disposals to strengthen its core capital to meet more stringent European Union regulations.
The bank’s chief executive Federico Ghizzoni has said the deal could add 20-25 basis points to core capital.
($1 = 0.9321 euros)
Editing by Jane Merriman