The merger between French insurer Axa and its holding company Finaxa is a step closer after the terms and conditions of the deal received the approval of both organizations' boards.

Axa revealed in April that it was looking into the process of absorbing its holding company, Finaxa, in order to simplify the company’s structure and to gain direct control of the Axa brand. Now, after attending meetings on June 29, the management board of Axa and the board of directors of Finaxa have approved the merger conditions.

Following a review by independent directors, the boards of Axa and Finaxa have set an exchange ratio of 3.75 Axa shares for one Finaxa share. Furthermore, independent banks respectively appointed by the two companies’ boards have each confirmed that the exchange ratio is fair to the shareholders of each company.

The terms and conditions of the merger, including the exchange ratio, will now be submitted to Court Appointed Merger Auditors in France, who will deliver their reports before December 16, 2005, the date of the Extraordinary General Assemblies of Finaxa and Axa at which the merger will be presented for approval to the shareholders of each company.

According to Forbes, Axa will fund the deal by issuing between 288 and 299 million shares.