AXA S.A. (AXA) has successfully offloaded 76 million shares of its US life insurance business AXA Equitable Holdings (EQH), decreasing its ownership from 60.1% to 48.3% and raising $1.5 billion in net proceeds.
The sale consisted of a secondary public offering of 40 million shares – at a public offering price of $20.50 per share – and the sale to EQH of 30 million shares (the share buyback) at the per share price paid by the underwriters in the offering.
In addition, the underwriters exercised in full the over-allotment option to purchase an additional 6,000,000 EQH shares.
AXA Chief Executive Officer, Thomas Buberl, said the successful placement of another tranche of EQH shares leading to the deconsolidation of EQH from AXA’s financial statements represents a “major milestone in AXA’s transformation journey, and provides additional financial flexibility for the Group, notably in the context of our stated priority to reduce leverage.”
Following the successful completion of the public offering and share buyback, the retained non-controlling minority stake in EQH is deconsolidated and will subsequently be accounted for using the equity method.
“Since the IPO, AXA Equitable Holdings has been delivering strong operating results, and we wish them continued success as a leading US-listed financial services company,” Buberl added.
The transaction is expected to result in a negative net income impact of approximately $789 million in AXA Group’s HY 2019 consolidated financial statements.
AXA says this impact reflects the difference between the offering price and the consolidated book value of both the EQH shares sold in the transaction, and AXA’s remaining 48.3% stake in EQH.
