French asset servicer CACEIS has agreed to acquire Dutch custodian KAS Bank for €188 million, enabling it to expand its services to local pension funds and insurance companies.
The acquisition will increase CACEIS’ assets under custody and administration (AUC/A) to €4.7 trillion, as it expands its market coverage in Germany, Netherlands and the UK.
The two banks stated: “Both institutions are involved in the same activities, but in different markets, targeting the institutional investors and financial institutions segments and focusing on the development of new technologies and digital processes.”
The transaction is expected to be completed in the third quarter of 2019, subject to approval from the Dutch Central Bank and European Central Bank.
“CACEIS will further strengthen its expertise in servicing institutional investors such as pension funds and insurance companies, in order to distribute these services on a global basis. The combination is anticipated to create value for our shareholders and will broaden and deepen our offering in Europe,” said Jean Francois Abadie, CEO, CACEIS.
The Dutch market is known to be the home of some of Europe’s largest pension funds, as well as leading private equity and real estate funds.
The acquisition will also provide KAS Bank accesses to a larger balance sheet, as it looks to utilise CACEIS asset servicing capabilities for its ‘global centre of excellence for pension funds.’
“Teaming up with CACEIS increases our competitive strength and enhances our investment and innovation power in a market where scale is an increasingly important factor,” said Sikko van Katwijk, chairman of the managing board, KAS Bank.
“Our Dutch, German and UK clients will benefit from the critical size with more than €2.8 trillion assets under custody, the solid capital position and the extended product range this combination will bring.”
Europe has been rife with M&A activity between asset servicers, however, this has mostly been contained within fund administration. This has been the case with examples such as Northern Trust and Apex Group that acquired fund administration businesses in Switzerland Luxembourg in 2017.
The odd occasion of an acquisition outside of fund administration was BNP Paribas Securities Services, which bought the depositary banking business from Italian bank Banco bpm SpA for €200 million last year.
The last major deal between two sub-custodians in Europe was in 2013 when Citi agreed to buy Dutch bank ING and its custody and securities services business in Central and Eastern Europe.