China Insurance Regulatory Commission (“CIRC”) has issued its approval in connection with the proposed transfer by AXA’s wholly-owned Swiss subsidiary, AXA Life ltd., of its entire 15.6% interest in Taikang Life, China’s 4th largest life insurer, to a consortium of new and existing shareholders. The consideration for this transaction amounts to USD 1.2 billion (or ca. Euro 0.9 billion). This corresponds to implied 2009 multiples of 21x net earnings1 and 6x book value1.
This transaction is expected to generate a positive impact of ca. Euro 0.8 billion in Net Income and reduce debt gearing by 1 point in the first half of 2011.
The completion of the transaction is subject to obtaining other CIRC approvals which are pending.
AXA continues to actively develop its life insurance business in China through AXA-Minmetals, its joint venture with Minmetals Corporation. As announced on October 28, 2010, and pending regulatory approvals, this company will be transformed into ICBC-AXA, a joint venture with the largest Chinese bank by assets and clients. This joint venture will be the vehicle for AXA’s growth in the Chinese Life insurance sector. The sale of AXA’s interest in Taikang Life, which was acquired through the Winterthur transaction in 2006, is motivated principally by Chinese regulatory positions restricting the ability of foreign investors to hold multiple interests in the Chinese life insurance sector.
Source : AXA Press Release
