Franco-Belgian banking group Dexia has said it will begin exclusive negotiations with New York Life Investments on the sale of Dexia Asset Management (DAM).
The financial group said that its decision followed a bid by New York Life but did not reveal the value of the offer made by the investment management firm. As of July 31, New York Life owned US$388 billion worth of assets.
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Dexia said in a statement said, "During the auction process, New York Life Investments was one of the final contenders. New York Life Investments constitutes a solid partner to pursue Dexia Asset Management’s commercial development."
Dexia was hit by the interbank market’s liquidity in 2008 and Eurozone Sovereign debt crisis in 2011. It was bailed out thrice by the governments of France, Belgium and Luxembourg. The group then agreed to dispose of its commercial franchises and reduce its debt.
The proposal to sell DAM was part of the resolution made to this effect.
Dexia entered an agreement with GCS Capital in December 2012, to sell 100% stake in its asset management arm but has terminated it in July 2013 because of the failure of GCS Capital in meeting "its contractual payment obligations".
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By GlobalDataDAM is one of the last assets put on sale as part of the orderly resolution plan of the group. It sold Dexia Bank Belgium in 2011, Dexia RBC Investor Services, DenizBank and Dexia Banque Internationale à Luxembourg in 2012, and Dexia Municipal Agency earlier in 2013.
