AXA buys Bermuda-based XL for $15 bn

France’s AXA moved to buy Bermuda-based XL Group for $15.3 billion on Monday to create what it said would be a world leader in property and casualty insurance.

Europe's second-biggest insurer offered $57.60 for each XL share, a 33 per cent premium to Friday's closing price, and said buying XL would result in property and casualty insurance rising to half of AXA’s earnings, from 39 percent.

XL has already agreed to AXA's offer, and AXA, which ranks as Europe's secondbiggest insurer in terms of market capitalisation behind Germany's Allianz, will look to de-list XL's shares. AXA said it would finance the deal with debt, cash and the proceeds of the IPO of its U.S. business.

Insurers are turning to takeovers to strengthen their businesses as they face tougher regulation and falling returns from financial market investments. AXA’s deal comes just over a month after American International Group said it would buy reinsurer Validus for around $5.6 billion.

P&C insurers' stocks fell during last year's natural disaster season and have attracted the attention of bidders as premiums are rising after several years of falling rates.

Allianz had also been seen as a possible suitor for XL, but a source close to the German company said Allianz was not overly concerned by AXA scooping up XL.

AXA’s shares fell 6.9 percent to ^ 23.33 by 0955 GMT, as some analysts said the deal looked pricey.

Chief Executive Thomas Buberl said the deal will enable AXA to dominate the global property and casualty market, and reduce its exposure to the volatility of financial markets.

“We will be number one in commercial insurance,” Buberl told a news conference in Paris.