Axa to acquire XL Group for $15.3bn to create P&C insurance giant

Axa acquisition of XL Group : French insurance company Axa has made a mega deal of $15.3 billion to acquire Bermuda based insurance and reinsurance company XL Group to become the global leader in property and casualty (P&C) insurance.

XL Group, which has more than 100 offices across the world, is said to have strong footprint across North America, Europe, Lloyd’s and Asia-Pacific. Last year, the company had a gross written premium (GWP) of $15 billion, out of which reinsurance contribution was $5 billion.

As per the terms of the acquisition, shareholders of XL Group will get $57.60 per share for the Axa acquisition of XL Group.

Mike McGavick – CEO of XL Group, commenting on Axa acquisition of XL Group, said: “Today marks an unrivalled opportunity to accelerate our strategy with a new strength and dimension. With every confidence in how we have positioned XL Group for the future, it is a substantial testament to AXA’s leadership and commitment to maintaining the XL Group brand and culture that we have come to an alignment.

“We are excited at the opportunity to build the scale, geographical footprint, product portfolio, and the unmatched commitment to innovation that relevance in the global insurance industry requires. In AXA we have found like-minded partners committed to the absolute necessity to innovate and move this industry forward.”

Axa’s Italy headquarters in Milan. Photo courtesy of Kokky92/Wikipedia.org.

Axa says that the acquisition is in line with its Ambition 2020 strategic plan in which it has planned to grow selectively by making inroads in commercial lines, savings, health and Asia.

The French insurance company says that XL Group offers a premier specialty platform. This platform complements and at the same time diversifies the existing commercial lines insurance portfolio, and reinsurance capabilities of Axa, thereby enabling it an access to improved diversification and alternative capital.

Axa acquisition of XL Group has resulted in the French insurance company revisiting its exit strategy from its current US operations, which it expects to accelerate.

Axa and XL Group have a combined 2016 revenues of Euro 30 billion and total P&C revenues of Euro 48 billion.

Commenting on Axa acquisition of XL Group, Thomas Buberl – CEO of Axa, said that the transaction allows AXA to move its business profile from predominantly life and savings (L&S) business to predominantly P&C business. It will also help Axa to turn into the no.1 global P&C commercial lines insurer in terms of gross written premiums, said the Axa CEO.

Buberl, commented further on Axa acquisition of XL Group, saying: “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 P&C industry.

Axa acquisition of XL Group is likely to be completed during the second half of the year, and will be based on approval of XL Group shareholders and necessary regulatory approvals among other customary closing conditions.