/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
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
After the buy-back of
Euro 0.9 billion
of AXA APH shares currently held by AXA Life UK, net cash proceeds would be of
Euro 1.7 billion
for the Group.
This potential transaction does not call into question in any way the AXA Group's continuing long-term commitment to the UK market going forward. The Group remains fully committed to AXA's UK Direct Protection and Wealth Management operations. These operations have a market leading position in the UK, with the scale, products and services to be well positioned for market and regulatory changes such as the FSA's Retail Distribution Review (RDR) scheduled for 2012.