Italy’s Generali and the owner of France’s Natixis are set to combine their asset management operations to create a European giant overlooking 1.9 trillion euros ($1.979 trillion) in assets.The Italian insurer and French retail bank Groupe BPCE signed a preliminary deal underpinned by 15-year contracts to form a joint venture they will each own a 50% of.

The combined entity will have equal ownership, with each party holding 50% and sharing governance and control.

Natixis Investment Managers is set to merge with the asset management arm of Italian insurer Generali, creating the largest European asset manager by revenue.

With €1.9tn in AUM, the joint venture would allow the pair to expand globally and speed up a push into private markets.

The board of Italy's top insurer Generali has approved a memorandum of understanding (MoU) that paves the way for an asset management deal with BPCE's Natixis Investment Managers to crate a European champion,

Under the terms of the tie-up, BPCE and Generali Investments will combine their asset management operations in a 50-50 joint venture, people familiar with the situation said. A non-binding preliminary agreement could be reached as early as next week. It would still need to be approved by the relevant unions and authorities.

Generali and Natixis (BPCE group) on Tuesday signed a non-binding memorandum of understanding to create a European asset management giant that will have 1.9 billion euros in assets under management and 4.

The investment committee of Generali has given its green light to the Italian insurer's planned asset management deal with Natixis Investment Managers, two sources close to the matter said late on Sunday.