French insurance major AXA has agreed to sell to its UK-based traditional life and pensions businesses, its IFA protection and corporate pension businesses, and its annuity businesses to British buyout fund Resolution for consideration of GBP2.75bn.
AXA said this sale is consistent with its intention to focus on its wealth management business in the UK life and savings market.
The consideration of GBP2.75bn consists of GBP2.25bn in cash and GBP500m of Resolution senior deferred consideration notes.
AXA said it will use net cash proceeds from sale to develop its UK wealth management business and to redeploy cash more efficiently throughout its operations. AXA is expected to take a capital loss of EUR1.4bn on its 2010 earnings.
Approximately 2,200 AXA employees would be transferred to the Resolution on completion of the transaction. This transaction is subject to approvals and is expected to take place in third quarter of 2010.
Henri de Castries, chairman and CEO of the AXA Group, said: As we have shown in the past, we are committed to focus on businesses that benefit from the right combination of scale, competitive position, growth prospects and profitability, as this is the best way to create sustainable value for our clients, our distributors, our staff and our shareholders.
‘With this transaction, we are selling to Resolution businesses, notably protection and group pensions, which will benefit from Resolution’s bigger scale in these activities. We will focus on our UK wealth management business where we are among the leaders and plan to continue to grow fast.