Indosuez, the wealth management arm of French bank Credit Agricole, has agreed to acquire a majority stake in Degroof Petercam, marking a significant shift in the ownership of Belgium’s largest private bank in recent months. The deal completes an intense process that started in May when Degroof confirmed some its major family shareholders wanted to sell their stake.
The deal, announced in a joint press release on Friday morning, is being executed in partnership with CLdN, an existing shareholder of Degroof Petercam, who will increase its stake to approximately 20 percent of the capital. This move reflects the commitment to preserve the group’s roots and domestic presence in Belgium, in line with Crédit Agricole’s partnership culture, as stated by Degroof Petercam.
1.55 billion euro, reportedly
According to Belgian press reports, the deal with Indosuez covers 80 percent of Degroof Petercam’s shares at 145 euro per share, giving the transaction a value of about 1.55 billion euro. Financial details however were not disclosed in the press release announcing the transaction. Spokespeople at both firms did not immediately respond to questions on the value of the transaction.
Several other firms have understood to have made a bid for Degroof Petercam in recent months. This includes Belgium’s Belfius, Dutch bank ING and one or two Swiss wealth management firms.
The alliance between Degroof Petercam, which manages some 71 billion euro in client assets, and Indosuez Wealth Management, with 135 billion euro in assets under management, aims to create a pan-European leader in wealth management, capitalizing on global growth opportunities and positioning itself as a consolidator in the European market.
«This proposed alliance will be an important step in our development in Europe, in line with our strategic plan, and will make Belgium our second domestic market,» said Jacques Prost, chief executive officer of Indosuez Wealth Management, in a statement.
Six Belgian families selling out
Until the transaction is completed, Degroof still is majority owned by a group of Belgian shareholders, including Guimard Finance, CLdN Finance, and Belgium’s Philippson, Siaens, Schockert, Haegelsteen, Peterbroeck and Van Campenhout families. Together they control more than 72 percent of the firm, while a group of unidentified “financial partners” owns about 22 percent.
Degroof Petercam’s history dates back to 1871 and employs some 1,400 people - a good 400 of which work from Luxembourg. The firm was created in 2015 through the merger of Degroof and Petercam. Its board of directors since then has comprised representatives of the families that owned stakes, including the likes of Baron Alain Philippson, whose grandfather founded Degroof in 1871 and who stayed with the firm for more than 45 years. Although he retired in 2020, 1939-born Alain Philippson still acts as pater familias, giving him a major say in his family’s finances including shares in the bank.
AML struggle
Although it remained profitable, Degroof in recent years has struggled to comply with increasingly stringent anti-money money laundering requirements in an increasingly competitive landscape that is pressed by stringent regulation. Luxembourg’s financial supervisor CSSF in December issued a fine of 1.56 million euro after it found the firm to be in “non-compliance with its professional obligations”. The fine still is the second-largest on record issued by CSSF.
Indosuez and Degroof said their clients would benefit from access to high-value-added services through the combined expertise and the international network and financing capabilities of the Crédit Agricole group. Moreover, Degroof Petercam’s employees would have the opportunity to become part of a group with diverse expertise present in over 46 countries worldwide. Additionally, this alliance strengthens shared values concerning social engagement, responsible investing, and diversity, the firms said.
‘Stable shareholder’
«The proposed alliance with Indosuez Wealth Management will provide us with a stable shareholder, backed by a leading global player. It is also a
solid strategic partner who will support the Degroof Petercam brand and who knows our activities inside out,» said Hugo Lasat, CEO at Degroof Petercam.
Through this transaction, in collaboration with the existing reference shareholder CLdN, Indosuez Wealth Management would gain access to a new client base in Belgium and internationally. The group is expected to further develop its expertise in financial management and advisory services, particularly in terms of funds, including ESG-focused funds, leveraging the expertise of the institutional asset manager Degroof Petercam Asset Management (DPAM) and investment banking activities.
Christian Cigrang, chairman of the board of directors of the group CLdN, said the transaction will bring it stake to about 20 percent. «This increase
is to be seen in light of the signing of the agreement with Indosuez Wealth Management which, as a controlling shareholder, will offer new prospects for Degroof Petercam’s clients and staff members. «