BNP Paribas has proposed buying out the remaining 50 per cent stake in investment company Exane that it does not already own, a deal that would help propel the French bank into becoming one of the main equities players in Europe.
The move follows BNP’s acquisition of Deutsche Bank’s electronic equities and prime brokerage businesses two years ago. It is part of a broader strategy to solidify the Paris-based lender as the dominant force in European investment banking and to take on Wall Street heavyweights.
“The idea is to be, if not the number one, one of the top three equity franchises in Europe,” Yann Gérardin, head of corporate and institutional banking at BNP, told the Financial Times. “If we are not recognised as a top player in equities three or four years down the road, it will be disappointing.”
BNP generated five times more revenue from its fixed income, commodities and currencies business than it did from equities and prime broking services last year. While it is one of the largest fixed-income players in Europe, its equities business has trailed competitors.
The deal would entail BNP buying out the partners who own the other half of the Exane business. BNP hopes to receive approval from regulators and shareholders in the second quarter, with the deal closing by the summer.
Gérardin said he expected BNP to complete the Exane integration next year.
BNP and Exane first struck up a partnership 17 years ago that focused on equity research and into which BNP outsourced its cash equities unit. The two businesses have also collaborated on equity capital market transactions.
The deal would bring the cash equities business back in-house, along with Exane’s derivatives and asset management units.
Exane, which employs 850 people in nine offices globally, generated €21.9m of net profit in 2019.
Nicolas Chanut, chief executive of Exane, said: “Our teams look forward to working even more closely with our BNP Paribas colleagues across prime services, global electronic trading, equity derivatives and equity capital markets to better service clients across the globe.”
BNP and Exane did not disclose terms of the proposed acquisition.
Gérardin said taking over Exane was the “logical next step” after migrating the Deutsche Bank businesses. Last year BNP said it was seeking to displace Goldman Sachs as one of the top three global prime brokers to hedge funds and displace Barclays as the dominant player.