MILAN, Nov 16 (Reuters) - Italian asset manager Anima Holding said on Thursday it has signed a binding agreement to acquire all of smaller peer Kairos from Swiss private bank Julius Baer.

Under the deal, which is expected to be completed by the second quarter of next year, Anima will pay up to 20 million-25 million euros ($21.7 million-$27.1 million), equal to Kairos' excess capital, the statement said. It will finance the purchase entirely with cash.

It added that the price may be subject to adjustments related to the trend in assets under management.

The agreement also envisages a co-investment scheme for some Kairos managers who currently own a 35% stake.

Kairos, an independent Italian asset and wealth management company with assets under management(AUMs) of 4.5 billion euros, had long been under strategic review by Switzerland's third-largest listed bank, which had already fully written off the value of its goodwill.

Anima's offer came after expected talks between Julius Baer and Zurich Financial Group failed to materialise, sources close to the matter said on Thursday. Zurich declined to comment.

"We are delighted to bring back to Italy a historical brand like Kairos," Anima Holding Chief Executive Alessandro Melzi d'Eril said in the statement.

Kairos is a natural fit for Anima, allowing it to expand in the private banking and wealth management segment, analysts said.

Anima, which reported AUM of 182 billion euros as of October, distributes its products through post offices and bank branches, including that of its biggest investor Banco BPM . National post operator Poste Italiane is Anima's No.2 investor. France's Amundi also holds a stake on behalf of clients.

Fondo Strategico Italiano (FSI) built a stake in Anima in February, fuelling speculation the Italian private equity fund was positioning itself for deals in the asset management industry.

"The transaction is consistent with Julius Baer’s strategic focus on its core business and allows it to concentrate on and further develop its business with Italian clients served out of Switzerland and other locations," the Swiss bank said in a separate statement. ($1 = 0.9211 euros) (Reporting by Andrea Mandalà, writing by Federico Maccioni, editing Giulia Segreti, Kirsten Donovan)