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. 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 will fund the deal through 3.5bn euros (£3.1bn) in cash, 6bn euros (£5.3bn) from a planned United States stock market listing of its life and annuity business and 3bn euros (£2.7bn) of debt.
Shares in XL Group have risen 23% since the start of the year. It said the deal will make AXA more focused on insurance risks instead of financial risks, a key issue amid tighter regulation of financial markets.
Buberl commented: "XL Group has the right geographical footprint, world-class teams with recognised expertise and is renowned for innovative client solutions".
AXA primarily deals in life and savings products, and the purchase will likely move it into a strong position in the global property and casualty market.
Completion of the transaction is subject to approval by XL Group shareholders and other customary closing conditions, including the receipt of required regulatory approvals, and is expected to take place during the second half of 2018.
Paris-based AXA said Monday that it has reached an agreement to buy all of XL Group Ltd in a deal approved by both boards.
On one hand, XL's Chief Executive, Mike McGavick, said,"Today marks an unrivaled opportunity to accelerate our strategy with a new strength and dimension". "The two companies share a common culture around people, risk management and innovation, positioning AXA uniquely for the evolving future of the P&C industry".
Jerome Schupp, fund manager at Geneva-based Prime Partners which owns AXA shares, said it was a "good deal" given AXA's plans to cut its exposure to financial markets, and that it looked positive on a long-term view.
AXA, which ranks as Europe's second-biggest insurer in terms of market capitalisation behind Germany's Allianz, said it would finance the XL deal via debt, cash and the proceeds of the forthcoming flotation of its USA business.