New Straits Times
Axa to pay US$15.3b ‘premium’ for XL
PARIS: Axa SA agreed to buy XL Group Ltd for US$15.3 billion (RM59.76 billion) in cash, seeking to capture a bigger slice of the United States property and casualty market as premiums rise after last year’s natural disasters.
The French insurer is paying US$57.60 per share, according to a statement yesterday. That’s about a 33 per cent premium compared with the stock’s closing price of US$43.30 on Friday.
Bloomberg reported on Saturday that Axa was in advanced talks on the deal, citing people familiar with the matter. Financing will come from €3.5 billion (RM16.84 billion) of cash at hand, an expected €6 billion from the planned US initial public offering (IPO) and €3 billion of subordinated debt.
Less than two years since taking over Axa’s top job, chief executive officer Thomas Buberl is ramping up dealmaking, refocusing on businesses such as P&C commercial lines while shedding some assets and focusing on fewer countries. The IPO of Axa’s US life unit is likely in the second quarter.
Companies like XL Group provide insurance backstops for other insurers and have become takeover targets after the heavy toll of natural disasters last year pushed prices for coverage higher.
The insurer also attracted interest from bigger rivals, including Germany’s Allianz SE, said people familiar with the matter last month.
Axa is making a return to large dealmaking more than a decade after its last major transaction, the purchase of Switzerland’s Winterthur.
Formerly a regional insurer in Normandy, Axa built itself into Europe’s second-largest insurer through major takeovers in the 1990s. Recent deals have been smaller-scale, acquiring assets or setting up partnerships in emerging markets including China, Nigeria and Colombia.