PARIS, June 14 /PRNewswire-FirstCall/ -- In response to recent press speculation, AXA confirms that it is in discussions with Resolution Ltd regarding a potential transaction concerning part of AXA's life & savings operations in the UK.
If implemented, this transaction would result in AXA retaining its market leading AXA Wealth Management and AXA Direct Protection businesses and selling the remainder of its UK life & savings business to Resolution Ltd.
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. This capital light business represented 41% of total UK APE in 2009.
The proposed transaction currently under discussion contemplates an aggregate purchase price of 2.75 billion pounds Sterling (or ca. Euro 3.3 billion). The purchase price would be payable in a combination of cash for 2.25 billion pounds (or ca. Euro 2.7 billion) and Senior Deferred Consideration Notes for 0.50 billion pounds (or ca. Euro 0.6 billion).In the event that the parties reach a definitive agreement and the transaction is completed, it would have the following principal impacts on AXA:
- Ca. Euro 1.4 billion exceptional capital loss accounted for in net income in 2010,
- +4 pts on Solvency I, which was estimated above 180% at March 31, 2010,
- -1 pt on debt gearing, which was 26% at December 31, 2009