French insurer AXA announced today that it has entered into an agreement to acquire XL Group, a leading reinsurer with strong presence in North America, Europe and Asia-Pacific.
The merger agreement was unanimously approved by the boards of AXA and XL Group. Total consideration for the acquisition amounts to $15.3bn, to be fully paid in cash. Under the terms of the transaction, XL Group shareholders will receive $57.60 per share. This represents a premium of 33% to the XL Group closing share price on 2 March.
Shares in XL Group have risen 23% since the start of the year.
Speaking on the deal, Thomas Buberl, CEO of AXA, said: “This transaction is a unique strategic opportunity for AXA to shift its business profile. The transaction offers significant long-term value creation for our stakeholders with increased risk diversification, higher cash remittance potential and reinforced growth prospects. The future AXA will see its profile significantly rebalanced towards insurance risks and away from financial risks.”
Right geographical footprint
“XL Group has the right geographical footprint, world-class teams with recognized expertise and is renowned for innovative client solutions. Our combined P&C Commercial lines operations, will have a strong position in the large and upper mid-market space, including in specialty lines and reinsurance, and will complement and further enhance AXA’s already strong presence in the SME segment. The two companies share a common culture around people, risk management and innovation, positioning AXA uniquely for the evolving future of the industry.”