Will Deutsche Bank's DWS be Acquired by France-Based Amundi?
Deutsche Bank’s DB DWS continues to grab interest of Amundi, a France-based asset manager, per a Reuters article. However, Amundi plans to strike a deal only if it is successful in attaining control over DWS.
The deal seems unlikely as Deutsche Bank plans to retain its control over the asset management unit, evident from failed merger talks with UBS Group UBS that had shown similar interests.
On the other hand, Amundi “sees itself as a consolidator but is not interested in playing the part of a junior partner in any deal”, the article said.
Deutsche Bank cannot afford losing control over its asset management business, which has been generating stable revenues so far. Further, the urgency to make a deal lost steam when merger discussions with Commerzbank CRZBY ended. Notably, at the time the German lender planned to use proceed from this sale to finance the merger.
Another company interested to make a deal with Deutsche Bank’s DWS is the Germany’s largest insurer, Allianz SE AZSEY, which seeks to merge its investment unit with DWS.
With €706 billion in assets under management as of Mar 31, 2019, Deutsche Bank has been making efforts to improve performance of its asset management unit. In the first quarter, the unit experienced inflows of about €3 billion due to its strategic alliances with Nippon Life, Zurich, DVAG and Generali.
Also, CEO Christian Sewing has been more focused on bolstering retail banking and asset management segments in order to offset impact from volatile investment banking business.
These restructuring moves might be a last resort for Deutsche Bank to check stock price from falling further and improve financial performance. Also, the bank’s impressive cost-saving strategy is expected to lend support.
Shares of the company has lost 21.3% in the past six months compared with 1.7% decline of the industry it belongs to.
Deutsche Bank currently carries a Zacks Rank #4 (Sell).
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