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 percent-owned Axa Asia Pacific Holdings (APH)
effectively split in two has met with unanimous rejection by APH
Under the proposed deal, Axa would acquire 100 percent of APH’s
Australian insurer AMP would acquire 100 percent of Axa APH’s
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
APH’s 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 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
APH has operations in Hong Kong, China, India, Thailand,
Philippines, Indonesia, Singapore and Malaysia.
Responding to the proposed deal APH’s chairman Rick Allert said in
a statement: “It is the unanimous view of the Independent Board
Committee that the proposal significantly undervalues Axa
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$255.5 million in the first half