French asset manager Amundi has agreed to acquire Pioneer Investments from Italian banking group UniCredit in a cash deal worth €3.5bn.

The deal would add about €222bn in assets to Amundi’s books. The combined entity would be the eight largest asset manager worldwide with €1.27 trillion of assets.

Amundi expects the acquisition to offer €150m of costs synergies through merger of investment platforms, streamlining of IT services and rationalisation of administrative and back-office costs, and €30m of revenue synergies from potential cross selling and other revenue optimisation.

Amundi CEO Yves Perrier said: “The acquisition of Pioneer Investments is a major step to anchor Amundi as the European leader in asset management.

“This acquisition will reinforce Amundi’s industrial model and will benefit our clients whilst creating significant value for our shareholders. Pioneer Investments is a world class asset manager that has a highly complementary business and geographic profile.”

In a statement, UniCredit said that it will get a €315m extraordinary dividend from Pioneer.

UniCredit added that the transaction would generate a consolidated net capital gain of €2.2bn in 2017 and would improve its core tier 1 capital ratio by 78 basis points.

The deal already secured the nod of the boards of directors of both companies. It is expected to be completed in the first half of 2017, subject to regulatory and antitrust approvals.

The two parties also agreed to a ten-year product distribution agreement as part of the deal.