Paris-based AXA has entered into exclusive negotiation with Genworth Financial to acquire 100 percent of Genworth Lifestyle Protection Insurance (Genworth LPI), for a total cash consideration of 475 million euros.
Genworth LPI is the seventh largest creditor insurance player in Europe (with 4 percent market share), providing credit and lifestyle protection insurance, AXA said in a statement. The company benefits from a broad distribution network based on well-established relationships with a wide range of leading financial institutions, AXA said.
Over the past years, it has built a strong competitive advantage with its proprietary IT platform providing centralized data and strong scalability, the statement went on to say.
AXA provided an overview of the rationale for proposed deal:
- The acquisition would be a milestone in the development of AXA credit and lifestyle protection activities, which are currently operated by AXA Creditor, and would accelerate AXA’s business mix shift towards more protection products, in line with the Ambition AXA strategy.
- The combined operations would form the third largest creditor insurance market in Europe, with a 9 percent market share, creating a European leader in credit and lifestyle protection.
- The transaction would complement AXA’s credit and lifestyle protection activities presence in key mature markets such as France, Germany and Italy and would provide entry into new markets with strong fundamentals, notably the Nordics and Southern Europe. It would support the group’s presence in high growth markets such as China, Latin America, Turkey and Poland.
- With Genworth LPI’s strong and lasting relationships with major banks, insurance companies and auto finance providers, AXA credit and lifestyle protection activities would be able to double their portfolio of strategic partners in Europe.
The proposed transaction is subject to customary conditions, including completing a works council consultation process and obtaining required regulatory approvals, and should be finalized before the end of 2015.
Further financial implications of this transaction, which is expected to be modestly accretive to underlying earnings, will be disclosed at a later stage, AXA said.
This acquisition would represent “a unique opportunity to obtain a scalable footprint in Europe and capture additional business potential in high growth markets,” said Denis Duverne, deputy chief executive officer of AXA.
“This transaction would also contribute to bringing our global expertise to the next level thanks to significant technical skills, a reinforced range of administration and digital tools as well as an enlarged products portfolio,” he continued. “We are particularly enthusiastic at the idea of supporting Genworth LPI in this new development phase, in the best interests of both its clients and employees.”
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