French insurer AXA agrees to buy XL Group fro $15bn

axa insurer france
AXA buys Bermuda-based XL group

AXA (EPA:CS), France’s biggest insurance company, announced Monday they are buying XL Group for $15 billion, as part of their plan of becoming world leader in property and casualty insurance.

They offered XL group a 33 percent premium on Friday’s closing — $57.60 for each share.

AXA, which is also Europe’s second biggest insurer, announced during the weekend they will be funding the takeover 3.5 billion euros  by cash, 6 billion from the planned US IPO and 3 billion of subordinated debt.

“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,” said Thomas Buberl, AXA CEO.

The XL Group is a global insurance and reinsurance company with its headquarters in Hamilton, Bermuda and executive offices in Connecticut. They have around 100 offices in 6 continents.

The complete acquisition is expected to be finalised in the second quarter of 2018 and will accelerate the company’s US IPO move, also planned for the first half of this year.

Late February, the French insurer announced full-year results with underlying earnings and net income crossing the 6 billion euros in all major regions up to 7 percent. The results marked a record in the history of the company. 

“Our new business value was up 8%. Health was our fastest growing business in 2017, with revenues and earnings growing at 6% and 11% respectively,” said AXA’s CEO.

Last July the company joined RE100, as part of their plan of committing to procure 100 percent of electricity from renewable sources by 2025. 

“We continue to lead our industry in the fight against climate change, notably by quadrupling our 2020 green investments commitment,” said Buberl.

Shares were down 8.84 percent, trading at 22.84 euro, as of 11:30 (GMT).