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March 15, 2010updated 15 Mar 2017 6:12pm

Axa’s Asia-Pacific ambitions thwarted

Putting at least a temporary end to Axas ambitions to grow its Asia Pacific footprint substantially, a deal that would see the French insurers 64%-owned Axa Asia Pacific Holdings (APH) effectively split in two has met with unanimous rejection by the APH board. Under the proposed deal, Axa would acquire 100% of APHs Asian businesses while Australian insurer AMP would acquire 100% of Axa APHs Australian and New Zealand businesses.

By Stafford Thomas

Putting at least a temporary end to Axa’s ambitions to grow its Asia Pacific footprint substantially, a deal that would see the French insurer’s 64%-owned Axa Asia Pacific Holdings (APH) effectively split in two has met with unanimous rejection by the APH board.

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Under the proposed deal, Axa would acquire 100% of APH’s Asian businesses while Australian insurer AMP would acquire 100% of Axa APH’s Australian and New Zealand businesses.

Specifically, it was proposed that AMP would acquire 100% of APH for A$11bn ($10.2bn), of which A$6bn would comprise cash to Axa. AMP minorities would receive A$1.3bn in cash and shares in AMP valued at A$3.7bn.

In turn, it was proposed that Axa acquire from AMP 100% of APH’s Asian operations for $A 7.7bn in cash. This would result in a net cash outlay by Axa of A$1.8bn.

Commenting on the proposed deal, chairman of Axa’s management board Henri de Castries said: “This transaction would reinforce Axa’s growth profile by doubling its exposure to the Asian life and savings market and further optimise the corporate structure of the group.”

APH has operations in Hong Kong, China, India, Thailand, Philippines, Indonesia, Singapore and Malaysia.

Responding to the proposed deal, APH  chairman Rick Allert said: “It is the unanimous view of the independent board committee that the proposal significantly undervalues Axa APH.

“The proposal has been received against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability.

He added that the terms of the proposal also “imposed excessive uncertainty and risk” on APH’s minority shareholders.

APH’s Asian operations are the most significant portion of its business and in the first half of 2009 contributed two thirds of Axa APH’s operating earnings of A$255.5m in the first half of 2009.

 

AXA

Central and Eastern Europe

 

Market share (%)

Rank

Tied agents

Poland

5

8

1,393

Czech Republic

3

10

2,079

Hungary

3

10

322

Slovakia

2

15

1,331

Romania

2.6

10

570

All data as at 31 December 2008. Source: Axa

Free Report
img

Gain valuable insight on the Motor Insurance industry outlook for Asia Pacific

Asia-Pacific was the fastest-growing region globally during the review period (2016-2020), recording growth at a CAGR of 2.7%. China was the market leader, accounting for 52.9% of the region’s motor insurance premiums in 2020. To help you make the most of this significant growth, GlobalData’s has put together a comprehensive overview of the Asia Pacific motor insurance industry, including market sizing and forecasts. Read ‘Motor Insurance Industry Outlook in Asia Pacific’ for:
  • Analysis of leading insurers in the region
  • Details on regulatory requirements, including licensing rules, capital requirements, taxation regimes, and ownership quotas
  • Analysis of the impact of COVID-19 on the industry
  • Insight into key trends, technology developments, and potential disruptors in the motor insurance industry
  • Recent M&A activity in the motor insurance industry
Improve your business strategy with our extensive report. Download it for free, now.
by GlobalData
Enter your details here to receive your free Report.

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