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Deutsche Bank's DWS Said to Favor Deal With UBS Asset Manager

Steven Arons and Dinesh Nair

(Bloomberg) -- Deutsche Bank AG’s fund business sees a combination with UBS Group AG’s asset manager as the preferred strategic way forward though it continues to pursue other options, according to people familiar with the matter.

Talks about a potential tie-up between DWS Group and UBS asset management have been going on for some time but finding an agreement is complicated because Deutsche Bank isn’t willing to give up control of DWS, the people said. No decision has been reached and other options are still possible, they said, asking not to be identified discussing the private deliberations.

UBS has been considering a merger with DWS and that DWS has been in talks with the Swiss bank as well as other asset managers including Amundi SA and Axa SA about various forms of partnerships including joint ventures, Bloomberg reported this month.

A spokesman for DWS, which has a stock market value of 6.5 billion euros ($7.3 billion) declined to comment. The Financial Times previously reported that DWS and UBS are in “serious” talks about merging their asset management operations.

Both firms have been considering ways to scale to compete in an industry where margins are under pressure from an investor flight to cheaper, passive funds. Combining DWS and UBS would create an asset manager with roughly $1.5 trillion in assets under management, making it the second-biggest money manager in Europe after Amundi.

To contact the reporters on this story: Steven Arons in Frankfurt at sarons@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel

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