French insurance and investment giant AXA has confirmed that it plans to sell its operations in Poland, Czech Republic and Slovakia to UNIQA Insurance Group AG for €1 billion.
UNIQA had been pegged as one of three bidders in the running to secure AXA’s Central and Eastern European operations after rumours of a deal emerged last October.
The Austria-based insurer had reportedly made it down to a shortlist with Assicurazioni Generali SpA and Vienna Insurance Group before securing the deal.
Under the terms of the agreement with UNIQA, AXA will sell 100% of its Life & Savings, Property & Casualty and Pension businesses in Central and Eastern Europe.
The purchase price of €1.002 billion represents an implied 12.4x 2019E P/E multiple, and is expected to boost AXA’s Solvency II ratio by 2 points.
Completion of the transaction is expected to be finalised by the fourth quarter of 2020, once necessary closing conditions and regulatory approvals have been met.
“This transaction marks another step in the simplification of AXA’s footprint,” said AXA CEO Thomas Buberl. “We are convinced that AXA’s operations in Central and Eastern Europe will benefit from UNIQA’s strong presence and local expertise in the region to create new growth opportunities with a continued focus on delivering enhanced customer value propositions.”
He added: “I would like to thank the management teams and all the employees of our Polish, Czech and Slovakian operations, for their continuous engagement over the years and wish them all the success for the future.”
Some commentators have speculated that the insurer could be looking to exit markets where it does not have sufficient scale, in order to focus on expanding in Asia following its takeover of XL.
But on a broader level, these restructuring efforts could also be helping the firm to offset the low interest rate environment and improve its health, property and damage businesses.
