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.
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
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
He added that the terms of the proposal also
“imposed excessive uncertainty and risk” on APH’s minority
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.
Central and Eastern
All data as at 31 December 2008.