British investment group Resolution said Thursday it has agreed to buy French insurer AXA’s British life insurance and savings units for 2.75 billion pounds (3.3 billion euros, 4.0 billion dollars).
“Resolution and AXA are pleased to announce the agreed acquisition of the AXA UK Life Business by FPH, a subsidiary undertaking of Resolution,” the pair said in an official statement. Resolution added that it would seek to merge the new acquisition with Friends Provident, the British insurer which it had bought last year for 1.858 billion pounds.
“The total consideration payable is up to 2.750 million pounds,” the two companies added. The purchase involves a cash payment of 2.25 billion pounds with the rest paid in shares. The deal is expected to be finalised in September, but requires approval by Resolution’s shareholders and regulators. Resolution described the transaction as the “logical next step” in its life insurance strategy, and forecast cost-savings of about 75 million pounds per year over the next three years.
However, the deal was not a surprise for the market after the two groups had revealed earlier this month that they were working towards an agreement. Resolution is trying to lead consolidation in Britain’s insurance sector and Friends Provident was its first major acquisition in its bid to acquire three to four insurers over the next few years.
In a separate statement, AXA UK said that the deal followed a review of its life operations and would allow the group to focus on wealth management. “This is a significant step in AXA UK’s strategy that sharpens our focus on future profitable growth and builds on the market leading position that we have developed in our wealth management business, as well as in our other businesses,” said AXA UK boss Nicolas Moreau.
London, June 24, 2010 (AFP)