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 percent-owned Axa Asia Pacific Holdings (APH) effectively split in two has met with unanimous rejection by APH board.Under the proposed deal, Axa would acquire 100 percent of APHs Asian businesses.Australian insurer AMP would acquire 100 percent of Axa APHs Australian and New Zealand businesses.Specifically, it was proposed that AMP would acquire 100 percent of APH for A$11 billion ($10.2 billion), of which A$6 billion would comprise cash to Axa.AMP minorities would receive A$1.3 billion in cash and shares in AMP valued at A$3.7 billion.In turn, it was proposed that Axa acquire from AMP 100 percent of APHs Asian operations for $A 7.7bn in cash This would result in a net cash outlay by Axa of A$1.8 billion.Commenting on the proposed deal, chairman of Axas management board Henri de Castries said: This transaction would reinforce Axas 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 APHs chairman Rick Allert said in a statement: 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 APHs minority shareholders.APHs Asian operations are the most significant portion of its business and in the first half of 2009 contributed two-thirds of Axa APHs operating earnings of A$255.5 million in the first half of 2009