AMP, Axa Jointly Renew Acquisition Bid for Axa Asia Pacific

AMP Ltd. and Axa SA have jointly made a new takeover proposal for Axa Asia Pacific Holdings Ltd. for A$13.3 billion (US$13.1 billion), saying they already won approval from Australian Competition and Consumer Commission and New Zealand Commerce Commission.

The revised offer is A$6.43 a share, consisting of cash and AMP shares, said AMP, a Sydney-based wealth manager. This new bid is higher than AMP's previous failed proposal of A$6.22.

Axa Asia Pacific rejected the earlier bid by AMP in favor of National Australia Bank's offer of A$6.43. But NAB's acquisition proposal was blocked by ACCC because of the regulator's concerns over reduced competition in the retail investment market (BestWire, April 20, 2010).

Under the revised proposal, AMP would acquire 100% of Axa Asia Pacific, merge the Australia and New Zealand operations into its own structure and then divest the Asian operations to Axa SA, which currently owns 54% of Axa Asia Pacific.

Axa SA would buy 100% of Axa Asia Pacific's Asian operations for A$9.8 billion in cash from AMP. "Axa Asia Pacific'sAustralia and New Zealand businesses price would be A$3.5 billion," said Paris-based Axa SA.

Axa Asia Pacific said the company's independent directors are considering the proposal, which is also subject to various corporate reviews and further regulatory approvals.

"If this proposal is recommended, it is expected that the proposal would be submitted to the Axa Asia Pacific shareholders for their approval by the end of the first quarter of 2011," said AMP. The wealth management company is encouraging Axa Asia Pacific to accept the proposal.

The combined business would make AMP a leading wealth management company in the market, which is expected to more than double over the next decade, said Craig Dunn, chief executive of AMP.

"AMP would hold the number one market position for risk insurance, retail superannuation and retirement income in Australia. In New Zealand, AMP would be number one in the growing corporate superannuation market," said Dunn.

For the French parent, the proposed transaction would increase Axa SA's exposure to high-growth Asian markets where Axa Asia Pacific's Asian operations saw a 37% increase in annual premium equivalent sales and 28% rise in new business value in the first nine months of this year, said Axa SA.

The acquisition offer would deliver significant value to Axa Asia Pacific and AMP shareholders by creating a wealth management company with the scale and capability to offer greater competition in a fast-changing and high-growth market, said AMP.

In April, the ACCC said it did not oppose AMP's acquisition proposal for Axa Asia Pacific when it rejected NAB's offer. The competition regulator said an independent Axa or a merger between AMP and Axa would not have an impact on lessening of competition in retail investment market.

AMP offers retail and corporate superannuation and retirement income products in .

(By Iris Lai, Hong Kong bureau manager: [email protected])