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NAB Finalises AXA APH Deal
Australian banking major, National Australia Bank (NAB) says it has finalised its acquisition bid for AXA Asia Pacific Holdings (APH), reaching agreement with APH’s French parent, that values its subsidiary at nearly $14 billion.
Yesterday it was revealed that all three companies involved in the transaction had signed binding agreements for NAB to acquire control of APH’s life insurance and wealth management businesses valued at $4.6 billion.
Under the terms of the transaction, NAB will acquire all of APH whilst simultaneously selling the targets Asia Pacific assets to French parent AXA SA for $9.4 billion. AXA SA will assume $700 million of APH debt, leaving NAB with a Australian businesses that carries no debt.
NAB will also take APH’s 50 per cent stake in the joint venture AllianceBernstein in Australia.
Yesterday NAB said it would raise the equity component of the deal for investors who chose the cash and stock option would miss its interim dividend.
Under the terms of the deal, NAB has bid $6.43 a share payable in cash or a combination of $1.59 in cash or 0.1745 NAB shares for each APH share.
Based on Monday’s closing price, NAB’s cash and stock bid is worth $6.42, and the lender warned that the stock component may be raised again if it felt the need to raise further equity to finance the transaction.
The decision to raise additional capital largely depends on the number of investors who chose the cash option.
The proposal “provides the opportunity to enhance the access to competitive wealth management products . . . it is also an attractive strategically aligned opportunity that enhances NAB’s activities in the growing wealth management industry”. NAB chief executive Cameron Clyne.
APH shareholders will be asked to approve the bid at a meeting expected in June.
For the transaction to be successful, an approval from the competition regulator is still required, and a decision from the ACCC is widely expected on April 22nd.
The ACCC has raised concerns that parts of the wealth management sector could become consolidated by the merger, but bankers expected the deal to be approved.
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