Axa snaps up XL Group in insurance mega deal
The combination will create the biggest property and casualty commercial lines insurer based on gross written premiums.
Insurance giant Axa is to splash out 15.3 billion US dollars (£11 billion) on acquiring Bermuda-based XL Group, which specialises in property and casualty claims.
The combination will create the biggest property and casualty commercial lines insurer based on gross written premiums, with total revenues of 48 billion euros (£42.8 billion), Axa said.
XL has a strong presence in North America, Europe, Lloyd’s and Asia-Pacific and generated 15 billion US dollars of gross written premiums last year.
Axa chief executive Thomas Buberl said: “This transaction is a unique strategic opportunity for AXA to shift its business profile from predominantly life and savings business to predominantly property and casualty business.”
Under the terms of the transaction, XL Group shareholders will receive 57.6 US dollars (£41.70 )per share, a premium of 33% to its closing share price on March 2.
Axa will fund the deal through 3.5 billion euros (£3.1 billion) in cash, six billion euros (£5.3 billion) from a planned US stock market listing of its life and annuity business and three billion euros (£2.7 billion) of debt.
XL chief executive Mike McGavick said: “Today marks an unrivalled opportunity to accelerate our strategy with a new strength and dimension.
“With every confidence in how we have positioned XL Group for the future, it is a substantial testament to AXA’s leadership and commitment to maintaining the XL Group brand and culture that we have come to an alignment.”