By Gianluca Semeraro and Mathieu Rosemain

MILAN/PARIS (Reuters) -Generali and France's BPCE said on Tuesday they had signed a non-binding memorandum of understanding (MoU) to combine their asset management operations, aiming to create Europe's largest player by revenue.

The deal, which comes as the industry grapples with thinning profit margins, competition from U.S. giants and fast-evolving technology demands, is expected to be completed by early 2026, the two companies said.

"We are convinced that the asset management industry is undergoing rapid changes with scale and size being more critical than in the past," BPCE CEO Nicolas Namias told a joint press briefing with Generali CEO Philippe Donnet to present the "very ambitious" project.

Under the deal, BPCE's Natixis Investment Managers and Generali Investments will each own 50% of the combined business with "balanced governance and control rights".

The new entity, whose value the two companies estimated at around 9.5 billion euros, will have 1.9 trillion euros in assets under management (AUMs), ranking second in Europe after France's Amundi, and will lead in terms of revenue with 4.1 billion euros.

Namias will chair the board of the new joint venture, which will be based in Amsterdam, with day-by-day operations run out of Italy, France and the United States.

Donnet will be vice chair while chief executive will be Woody Bradford, who now heads Generali's asset management operations and previously Conning Holdings, a U.S. asset manager serving insurers and pension funds recently bought by Generali.

Natixis IM CEO Philippe Setbon will be deputy CEO.

Natixis IM is contributing around 1.3 trillion euros in AUMs to the venture and Generali just over 630 billion, Donnet said.

Benefits from the combination are projected to reach around 200 million euros over the course of five years. Over the same period Generali has committed to providing a 15 billion euros in "seed money" to kickstart new investment initiatives.

The deal faces regulatory hurdles, especially in Italy, where the government is keen for domestic savings to keep supporting the refinancing of its large public debt.

Rome must clear the deal under "golden power" legislation that gives it clout over firms deemed as strategic for the country.

On Monday, the three board representatives of leading Generali shareholder Francesco Gaetano Caltagirone, who is close to Italy's conservative government, voted against the deal as Generali's 13-member board approved the MOU, three people close to the matter said.

($1 = 0.9635 euros)

(Reporting by Gianluca Semeraro in Milan and Mathieu Rosemain in Paris; Additional reporting by Elvira Pollina; Writing by Valentina Za; editing by David Evans)