AXA has confirmed that it is in discussions with Resolution regarding a potential transaction concerning part of AXA's life and savings operations in the UK.
According to AXA, if executed, this transaction would result in AXA retaining its AXA wealth management and AXA direct protection businesses and selling the remainder of its UK life and savings business to Resolution.
AXA wealth management comprises AXA’s wrap platform (Elevate), Architas Multi-Manager, AXA Isle of Man and the AXA Winterthur Wealth Management specialist pensions and investments operations, which represented 41% of total UK APE in 2009.
The proposed transaction currently under discussion contemplates an aggregate purchase price of EUR3.3bn. The purchase price would be payable in a combination of cash for EUR2.7bn and senior deferred consideration notes for EUR0.6bn.
According to the company, in the event the parties reach a definitive agreement and the transaction is completed, it would have the principal impacts on AXA with EUR1.4bn exceptional capital loss accounted for in net income in 2010.
After the buy-back of EUR0.9 billion of AXA APH shares currently held by AXA Life UK, net cash proceeds would be of EUR1.7bn for the group.
However, the company has said that there is no certainty these discussions will result in a positive transaction.