AXA SA Hopes To Acquire AXA APH “One Day”

Global insurance giant AXA SA, the largest insurer in France, says it hopes that ”one day” it will complete a takeover of AXA Asia Pacific Holdings (APH) as it seeks to increase the footprint and market share of its life insurance business across eight emerging markets.

”We hope to be in the position to complete one day or the other. We want to change gear by increasing our footprint in emerging markets.” Chief Executive Officer Henri de Castries told investors in Paris.

If AXA SA’s bid for APH is to be successful, it needs to win the support of Melbourne based APH’s independent board members, which would seal Asia’s biggest takeover this year.

APH has so far rejected the $11 billion unsolicited joint bid launched by AXA SA and Australian wealth manager AMP. The bid includes a proposal for the sale of AXA SA’s majority stake in APH to AMP, whilst at the same time it would buy back APH’s Asian business for $7.7 billion.

This is the second time AXA SA has tried to acquire APH in the last five years. The company is keen on consolidating market share in emerging markets such as India, Indonesia and China as it seeks to embark on a strategy of tripling the share of earnings that come from emerging markets to 15 per cent within three to five years.

AXA SA’s larger German rival Allianz obtained a contribution of nearly 12 per cent of its main insurance units’ operating profits from emerging markets during the first half of the year.

AXA SA extended its November 19th bid for APH, after the target rejected the bid, saying it undervalued the life insurance business and that it would seek the support of key investors.

Since the bid was rejected, AMP’s stock price has surged, which AMP says means the value of its bid has risen, and that APH’s independent directors are obliged to review their decision.

AMP and AXA SA must win the support of both minority shareholders and independent directors in order for the bid to ultimately be successful.

A successful acquisition would mean that AMP would double the number of financial advisers in Australia and New Zealand and increase its assets under management by 37 per cent to $142 billion. Whilst AXA SA would be better able to target customers in Asia, a region of rapidly rising wealth.

APH runs AXA SA’s life insurance and wealth management business in Hong Kong, Singapore, China, Indonesia, Thailand, Malaysia, Australia, New Zealand and the Philippines.

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