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Allianz eyes U.S. purchase
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September 19, 2000: 3:56 p.m. ET
German insurer seeking scale in asset management, mulls several candidates
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NEW YORK (CNNfn) - German insurer Allianz AG is conducting exploratory acquisition talks with a number of U.S. asset management companies, including Nicolas-Applegate, but no deal is imminent, a source close to the situation told CNNfn.com Tuesday.
Among the companies being considered is Franklin Resources Inc. (BEN: Research, Estimates) of San Mateo, Calif., which runs the $233 billion Templeton Funds Group, the source said.
Sources told CNNfn.com Monday Allianz also is in discussions with U.S. fund manager Nicholas-Applegate, which boasts $44 billion in assets under management, with a focus on technology and other growth companies. Press reports have indicated that acquisition could cost Allianz as much as $2 billion.
Allianz also is talking with Waddell-Reed (WDR: Research, Estimates), which has about $40 billion in assets under management, and Gabelli Asset Management (GBL: Research, Estimates), which has about $23 billion under management, Reuters reported Tuesday.
Allianz and Nicholas-Applegate declined to comment, as did Waddell-Reed. Gabelli could not be reached for comment. The discussions come as Allianz looks for a U.S. presence to give it scale in the equity side of asset management, analysts said.
"If you want to have scale you need to go with a U.S. company," Dresdner Kleinwort Benson analyst Jonathan Lawler said. If Allianz finalizes a deal for a U.S. asset manager, the transaction would be in line with the trend of European companies scooping up U.S. companies. Allianz competes against such rivals as American International Group Inc., Axa and Zurich Financial Services, all of which have made U.S. acquisitions.
On Monday, Germany's Dresdner Bank AG agreed to acquire New York merger and acquisition adviser Wasserstein Perella & Co. for about $1.4 billion in stock. In August, Credit Suisse First Boston bought Donaldson, Lufkin & Jenrette (DLJ: Research, Estimates) for $13.4 billion, and UBS paid $15.8 billion for Paine Webber Group Inc. (PWJ: Research, Estimates) in July.
Axa Financial Inc. (AXA: Research, Estimates) also is in the process of acquiring financial services firm Sanford C. Bernstein, which manages more than $80 billion in assets.
"Allianz has the scale and pockets to consider any option," Lawler said.
Munich, Germany-based Allianz, a global insurance company, earned $39.4 billion ( 46.2 billion) in 1998; nearly 70 percent of its business is in property and casualty insurance while 30 percent is life and health insurance. Allianz owns 70 percent of bond-fund manager Pimco Advisors, which had $260 billion in assets under management in 1999.
Allianz could be looking for a company that would complement Pimco.
"Pimco does have some equity funds, but not enough," Goldman Sachs analyst Stephen Dias said.
Franklin Resources shares gained $1.59 to $43.63, Waddell & Reed rose 88 cents to $37, and Gabelli lost $1 to $26.12 in afternoon trading Tuesday. 
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