tiptrot.com March 21, 2018

Axa to acquire XL Group for $15bn

06 March 2018, 01:40 | Bernice Figueroa

France's AXA Agrees to Buy XL Group for $15.3 Billion in Cash

Thomas Buberl CEO of French insurer Axa the company is said to be in advanced talks to buy XL Group which has a market value of $11bn. Pascal Rossignol  Reuters

French insurer AXA announced today that it has entered into an agreement to acquire XL Group, a leading reinsurer with strong presence in North America, Europe and Asia-Pacific. An operation that includes a premium of 33% with respect to price of closing shares of XL on 2nd of March, which will be paid in cash.

Axa has described the transaction as a strategic opportunity for it to shift its business profile from predominantly life insurance to a predominantly property and casualty business. AXA said it would finance the deal with debt, cash and the proceeds of the IPO of its USA business.

"However, acquiring XL does give global commercial P&C lines exposure and further accelerate AXA's exit from more volatile business lines in the USA", it added.

The Wall Street Journal said the acquisition of XL "marks another step in AXA's plan to cut its exposure to financial markets and focus more on insurance products that aren't sensitive to swings in interest rates and stock prices". In reaction, XL shares are up almost 30% to $56.50 in pre-market trading. The offer is 1.51x XL's fully diluted book value per common share of $38.04 as at 31 December.

Upon completion of the transaction, the combined operations of XL Group, AXA Corporate Solutions and AXA Art will be led by Greg Hendrick, now the President and Chief Operating Officer of XL Group. "In Axa we have found like-minded partners committed to the absolute necessity to innovate and move this industry forward".

Greg Hendrick will work closely with Doina Palici-Chehab, AXA Corporate Solutions' Executive Chairwoman, and Rob Brown, AXA Corporate Solutions' CEO, to build an integrated organization and leadership team for this new company.

The combination of AXA's and XL Group's existing position will propel the Group to the #1 global position in P&C Commercial lines with combined 2016 revenues of ca.

AXA's shares fell 6.9 percent to 23.33 euros by 0955 GMT, as some analysts said the deal looked pricey.

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