The French bank BPCE and the Italian insurer Generali merge their investment divisions into a 50-50 joint venture to counter the growing competition from US asset managers. The newly created company will rise to become the second-largest asset manager in Europe with assets under management of 1.9 trillion euros and will even take the top position in terms of revenue.

BPCE CEO Nicolas Namias justified the decision with the challenges for European asset managers in global competition. "Natixis cannot be a global champion in the long term, and this applies to almost all players in the industry. That's why we are experiencing a wave of consolidation," said Namias on Tuesday.

Generali contributes around 600 billion euros to the joint venture and has committed to providing an additional 15 billion euros in so-called "seed capital" for new investments. The new unit will be led by Woody Bradford, currently head of Generali's investment division, while Namias will assume the chairmanship of the board.

The companies deliberately chose a joint venture model instead of a classic merger to retain control over their respective business areas. "We did not want to stand idly by but to create an innovative solution with this co-control structure," Namias explained.

The announcement comes against the backdrop of increasing consolidation in the European asset management market. Banks and insurers are increasingly examining whether to expand their asset management business, collaborate with partners, or exit the sector.

However, the merger encounters resistance in Italy. Members of the Generali board of directors close to minority shareholder Francesco Gaetano Caltagirone voted against the deal. The right-wing government under Giorgia Meloni also expressed concerns about the impact on national savings, which play a central role in refinancing Italy's national debt. Generali CEO Philippe Donnet dismissed the concerns: "The notion that Italian savings are flowing abroad is absurd.

The merger of Natixis and Generali follows BPCE's unsuccessful attempt last year to merge with the asset management division of the French insurer Axa. Instead, Axa opted for a cooperation with BNP Paribas.