French insurance company AXA has agreed to acquire Bermudian insurance and reinsurance firm XL Group for $15.3bn.

As per the deal terms, shareholders of XL Group will receive $57.6 per share. The transaction, which is subject to regulatory approvals, is expected to complete in the second half of 2018.

AXA said it would finance the agreement with debt, cash and the proceeds of the IPO of its US business.

XL Group delivers property, casualty and specialty products to industrial, commercial and professional firms, insurance companies and other enterprises across the world.

Founded in 1986, XL Group generated $15bn of GWP in 2017.

The company, which employs 7,400 people globally, has a presence across specialty and mid-market segments through insurance and reinsurance.

The deal creates a global property & casualty (P&C) commercial lines player across all lines.

AXA said the acquisition aligns with its Ambition 2020 preferred segments favoring product lines.

XL Group offers a premier specialty platform, which will complement and expand AXA's existing commercial lines insurance portfolio. The einsurance capabilities of XL will enable the French firm have access to improved diversification and alternative capital. 

AXA CEO Thomas Buberl said: “This transaction is a unique strategic opportunity for AXA to shift its business profile from predominantly L&S business to predominantly P&C business, and will enable the Group to become the #1 global property and casualty (P&C) Commercial lines insurer based on gross written premiums.

“The transaction offers significant long-term value creation for our stakeholders with increased risk diversification, higher cash remittance potential and reinforced growth prospects. The future AXA will see its profile significantly rebalanced towards insurance risks and away from financial risks.”

The combined entity will now hold the top position in P&C lines with combined 2016 revenues of approximately €30bn and total P&C revenues of about €48bn.

After the completion of the transaction, the combined operations of XL Group, AXA Corporate Solutions (the company’s large commercial P&C and specialty business) and AXA Art will be led by XL Group’s current president and chief operating officer Greg Hendrick.

He will be appointed as the CEO of the combined entity and join AXA Group's management committee, reporting to Buberl.

Hendrick will work with AXA corporate solutions' executive chairwoman Doina Palici-Chehab, AXA corporate solutions' CEO Rob Brown to develop an integrated organization and leadership team for the new company.


Image: AXA has entered into an agreement to acquire 100% of XL Group. Photo: Courtesy of adamr/FreeDigitalPhotos.net.