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UniCredit to Talk Amundi Accord When Meeting Credit Agricole

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(Bloomberg) -- UniCredit SpA and Credit Agricole SA will discuss a crucial distribution agreement between the two companies when their top executives come together in the coming weeks to debate the Italian bank’s takeover bid for a domestic rival.

The meeting, which the two sides are currently trying to schedule, will focus on UniCredit’s attempt to buy Banco BPM SpA, a lender in which Credit Agricole is the biggest shareholder, people familiar with the matter said. 

But UniCredit Chief Executive Officer Andrea Orcel and his French counterpart Philippe Brassac are also expected to touch on a potential extension of the sales arrangement for Credit Agricole’s asset management arm Amundi SA, the people said, asking not to be identified discussing private information.

Winning over Brassac would mark a key step for Orcel as he seeks to buy Italy’s third-largest lender, which would complicate government plans for the creation of a large domestic banking rival. Extending the deal with Amundi, which runs until 2027, may help his case.

The agreement requires UniCredit to sell a minimum level of the French asset manager’s products to its clients, Bloomberg News has reported. Orcel has long seen the terms of the agreement as disadvantageous and tried to renegotiate them. 

The announcement of UniCredit’s offer for Banco BPM on Monday stunned many observers, because Orcel is also considering an acquisition of Germany’s Commerzbank AG. Banco BPM’s board of directors, in an initial reaction, has rebuffed UniCredit’s proposal, a roughly $10 billion all-share deal with practically no premium when it was unveiled Monday.

UniCredit’s share price rose as much as 0.58% on Friday in Milan while Credit Agricole’s was up as much as 0.99% in Paris. 

Credit Agricole, which bought Italian lender Cariparma in 2007 and later expanded in asset management, retail, corporate and investment banking in the country, has a complicated network of relationships with both Banco BPM and UniCredit. 

The Paris—based company is Banco BPM’s largest investor, with about 9%, and it is a major partner for it in consumer credit and non-life insurance joint-ventures. 

Credit Agricole’s asset management arm Amundi, on the other hand, relies on UniCredit as its key Italian distribution channel. That cooperation stems from 2016, when Amundi agreed to buy Pioneer Global Asset Management from UniCredit.

Representatives for both banks declined to comment. Italian newspaper Il Messaggero first reported that a meeting between the two banks is likely to take place. 

--With assistance from Nicholas Comfort.

(Updates with share price in seventh paragraph. A previous version of this story corrected the year of contract expiration.)

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