Morning Coffee: 2,400 buy-side employees are wondering about their jobs this morning. The shaming of the most hubristic man in finance
France is in shock. BNP Paribas is acquiring Axa Investment Managers to create a new pan-European asset management firm with €1,500bn in assets under management and «powerful platforms of public and private assets.» The deal, which bankers from JPMorgan and Zaoui are advising Axa on according to Les Echos, won't close until 2025, thereby Axa's 2,400 people ample months to contemplate their fates.
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BNP Paribas seems excited about the acquisition and is declaring such things as «This major project, which would drive our growth over the long-term, would represent a powerful engine of growth for our Group.»
However, as any long term observer of mergers in the financial services (or any) sector will know, one organization rare pays €5.1bn for another without having an eye on cutting costs and removing employee duplication. Some of that duplication will involve portfolio managers at BNP Paribas Cardif, the insurance business of BNP Paribas, who will now have their €160bn of assets managed by their new colleagues at Axa. It will also involve employees doing similar things in areas like technology and operations at both firms.
This being France, cutting jobs is unlikely to be easy. Employee representatives are already being consulted on the merger, and union members have been demanding to know about the implications since early July, when rumours of the news first leaked. «Everything is explained,» they said at the time, noting that senior staff were already being targeted in job cuts, that workstations had been pruned, budgets cut and «relaxation spaces» removed.
The next 12 months are likely to be less relaxing again. The last time that AXA IM made (nearly 100) job cuts it
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