ITALY - AXA has acquired a 50% stake in the open pension fund business of the Banca Monte dei Paschi di Siena Group (BMPS) in a bid to improve its distribution network in the Italian market.

The €1.15bn deal with Europe's oldest bank also included the acquisition a 50% stake in MPS Vita, BMPS' life and savings business. This will become the sole provider of pension funds for AXA and BMPS clients in Italy. 

AXA spokeswoman Armelle Vercken said AXA planned to leverage BMPS' customer base to expand its pensions funds business. She pointed to "very strong growth prospects" in a comparatively underdeveloped insurance market.

In a joint presentation, the firms pointed to potential for growth in individual and group defined-contribution schemes as a result of pensions reform and Italian families' pensions gap.

AXA Assicurazioni, AXA's existing Italian business, will continue to operate independently but will become the exclusive distributor of BMPS banking products. With 1.6m customers, AXA Assicurazioni has a 3% share of the non-life market.

Vercken said that the 10-year deal, which gives AXA 7% of the Italian life assurance market, reflects "a common project to address new market opportunities".

As part of the deal, AXA will help BMPS expand outside Italy "in very specific countries where AXA is not currently operating". Likely targets include Scandinavian markets and North Africa outside Morocco, where AXA is a market leader. 

Although equal numbers of each company's representatives will sit on the board, AXA will acquire management control of the two operations. BMPS will retain the right to veto on significant strategic decisions.

"It is AXA's policy to keep management control in partnerships," said Vercken.