AXA, the Paris-based, CAC-40 insurance giant, said today that it plans to list its sizeable US life insurance operations, which include its 64% stake in the AllianceBernstein asset management business, as it continues to shed non-core operations.
The news sent AXA’s shares up by around 2% in early trading.
In a statement released early Wednesday morning Paris time, AXA said it was divesting itself of the operation “to create significant additional financial flexibility” in order to “accelerate AXA’s transformation” in line with its “Ambition 2020 objectives”.
Ambition 2020 is the company’s strategic plan, unveiled last year.
The proceeds from the initial public offering next year, it said, would be reinvested in priority segments “and/or potentially returned to shareholders, depending on opportunities and market conditions”.
Early estimates were that the sale could raise around US$4bn.
AXA says its US business currently looks after more than 2.5 million customers. Its AllianceBernstein operation had some US$498bn in assets under management at the end of March, and last year contributed €191m to AXA’s underlying earnings.
Published reports noted that the deal would potentially be complex because AllianceBernstein already has listed shares in the US. The plan is for the 36% of the asset management business not held by AXA to remain a separate, publicly traded entity, which will retain the AllianceBernstein name, according to these reports.
The news of the planned initial public offering comes just weeks after the chief executive of AllianceBernstein, Peter Kraus, was dismissed, along with eight other key members of its board, and replaced with individuals described as being closer to AXA than the executives they replace had been.
Although based in the US, AllianceBernstein, which also goes by its initials as AB, has 47 outposts around the world in 21 countries, including London and PAris, and employs some 3,436 people, according to its website.
‘Accelerate the transformation’
AXA chief executive Thomas Buberl said the company believed the current financial environment would be “supportive of this strategic initiative, which would create significant additional financial flexibility to accelerate the transformation of the AXA Group around health, capital-light savings, protection and P&C commercial lines, our priority lines of business”.
“At the same time, we are convinced our US operations would be better positioned as a listed company in the US, operating on a level-playing field under local regulatory rules,” he added, in a statement accompanying the news of the planned IPO.
To read and download the full AXA announcement on the company’s website, click here.
As reported, AXA confirmed in October that it planned to merge its life and general insurance operations in Singapore, after some of its traditional multinational rivals in the life insurance space –Standard Life and Zurich International – have pulled out of the city-state altogether.
Last May, AXA revealed plans to sell its UK non-platform investment and pensions business, AXA Wealth, and its Sun Life direct protection business, to Phoenix Group Holdings, a FTSE 250-listed, closed-life insurance fund consolidator that specialises in the management and acquisition of closed life and pension funds, formerly known as the Pearl Group. It also sold its Elevate platform business that month, to Standard Life.
Last April, AXA unveiled plans to sell its Isle of Man offshore investment business to the Life Company Consolidation Group, which was founded in 2013 with the purpose of buying and consolidating life company books across Europe. That operation has now been rebranded Utmost Wealth Solutions.