Axa to Install New Asia Management as It Closes Asia/Pacific Transaction

Axa SA is appointing new top management in Asia when it closes on its acquisition of Axa Asia Pacific Holdings' Asian business April 1. The move will see the departure of Andrew Penn, chief executive officer of Axa Asia Pacific Holdings, who has been with the company for 20 years.

The new CEO of Axa Asia will be Mike Bishop, a member of the Axa Group executive committee and previously CEO of AXA Asia Life, a division of Axa Asia Pacific. He will be responsible for Axa's life and savings business, as well as management of the development of the group's property/casualty businesses in Asia.

Another executive committee member, John Dacey, will take up the new role of vice chairman for the Asia/Pacific region, focusing on Axa's expansion in the region, following the closing of the transaction. He was formerly chief executive of Axa's Japan and Asia/Pacific business unit, which will be restructured into Axa Asia and Axa Japan.

Both Dacey and Bishop will report to Axa Chairman and CEO Henri de Castries.

Jean-Louis Laurent Josi, Axa Japan's CEO and another executive committee member, will also report directly to de Castries.

Gaelle Olivier, the new CEO of Axa Asia P&C, will report directly to Bishop.

Axa's Asian life and savings operations were among the fastest growing within the group in 2010, with "very strong" new business profitability, said de Castries in a statement.

"This strategic transaction allows us to reinforce our growth profile with a significant increase in our exposure to high-growth markets and is fully consistent with our ambition to combine value and growth through an effective capital management strategy," noted de Castries.

The acquisition will cost Axa a net cash payment of A$2.6 billion (US$2.63 billion), the company said. The deal sees Axa Asia Pacific'sAustralia and New Zealand businesses merging with AMP Ltd., while the remaining Asian operations are sold to its French parent, Axa SA.

The approved proposal offers shareholders a combination of cash and AMP shares, allowing shareholders to maintain an investment in Axa Asia Pacific'sAustralia and New Zealand businesses, said Sydney-based Axa Asia Pacific Chairman Rick Allert (BestWire, March 3, 2011).

The final consideration to be paid to Axa Asia Pacific minority shareholders comprises 0.73 AMP shares and A$2.5464 in cash per Axa Asia Pacific share, according to Axa.

Through the transaction, AMP will purchase 100% of Axa Asia Pacific's outstanding shares for A$13.3 billion, while AMP will buy Axa's shares in Axa Asia Pacific for A$7.2 billion in cash. Axa will acquire from AMP 100% of Axa Asia Pacific's Asian operations for A$9.8 billion in cash. Axa Asia Pacific'sAustralia and New Zealand businesses will be valued at A$3.5 billion, noted Axa.

The insurance group estimated around 700 million euros (US$991.1 million) of exceptional gain in net income related to the disposal of the Australia and New Zealand operations will be recorded in Axa's 2011 first-half financial results.

The transaction will also lower the group's solvency ratio to drop by one percentage point to 181% and increase its debt gearing by four percentage points to 32% in the first half of this year, said Axa.

Earlier in March, Axa said it has gained approval from the China Insurance Regulatory Commission to sell its entire 15.6% stake in Taikang Life Insurance Co. Ltd., the fourth-largest life insurer in China, for US$1.2 billion to a consortium consisting of new and existing shareholders (BestWire, March 15, 2011).

Axa said the sale is motivated principally by Chinese regulatory positions restricting the ability of foreign investors to hold multiple interests in the country's life sector. Taikang Life was acquired through a Winterthur transaction in 2006.

(By Rebecca Ng, Hong Kong news editor: [email protected])