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UBS Group (UBS) Pitches for NN Group's Asset Management Arm

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UBS Group AG (UBS - Free Report) and Deutsche Bank AG’s (DB - Free Report) asset-management unit, DWS Group, with their final bids, are suitors for the acquisition of NN Group’s asset management arm, NN Investment Partners. The news was reported by Reuters, citing people with knowledge of the matter, who asked not to be identified.

The bids for the buyout follow NN Group’s April announcement of evaluating “strategic options for its asset management business, covering a broad range of options including a merger, joint venture, or (partial) divestment.”

Markedly, NN Investment Partners has 300 billion euros of assets under management. Per sources, NN Group expects to sell the business for 1.4 to 1.6 billion euros ($1.9 billion), providing it ample capital to expand its overseas presence.

However, UBS Group and DWS Group are not the only companies eyeing the acquisition. Going by the sources,Prudential Financial Inc. (PRU - Free Report) and U.S. asset manager Nuveen are also carrying out due diligence and are interested in bidding ahead of a binding bid deadline in early July.

The deal is a strategic fit for UBS Group, as it will enable the company to gain market share and aid in maintaining the spike in trading volumes caused by the pandemic, which has led to a notable surge in the top line.

Our take

UBS Group’s strong operating fundamentals, diversified product offerings and efforts to expand operations by entering partnerships on the back of a strong balance sheet position will help it gain market share.

Shares of this Zacks Rank #3 (Hold) company have gained 5.4% compared with the industry’s growth of 8.9%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Also, in a race to scale up business and reduce costs, consolidations and M&A activities in the asset management space have been on the rise in recent times. This April, Waddell & Reed Financial was acquired by Macquarie Asset Management, the asset management division of Sydney, Australia-based Macquarie Group. Upon closure, Macquarie divested Waddell & Reed’s wealth management business to LPL Financial (LPLA - Free Report) for $300 million.

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