AXA close to UK sale

The French insurance group AXA is
close to selling its UK
operations to insurer Resolution, freeing it up to expand in high-growth Asia.

Resolution, which was set up in
2008 to buy slow-growing British insurance companies, hopes to complete the
£2.75bn takeover by July.

Analysts say offloading its UK operations
could make sound financial sense for AXA.

“In my view it’s one of the
least attractive (markets) in Europe,”
said West LB analyst Andreas Schaefer. “Margins are rather low, and
overall growth is not really sufficient.”

The deal, to be part-funded by
requesting £2bn from shareholders, would be Resolution’s second takeover,
having acquired Friends Provident last year.

Resolution has faced criticism for
not sealing enough deals.

“This move will take some
pressure off Resolution’s management, who having targeted two or three acquisitions
this year have so far not announced any,” said Oriel Securities analyst
Marcus Barnard.

Disposing of its British operations
will give AXA more flexibility to finance takeovers in Asia,
where the group has been striving to increase its presence, commentators say.

“It leaves them well placed to
take advantage of assets as and when they come up for sale,” said James
Shuck, an analyst at stockbroker Jefferies.

AXA is one of the largest foreign
insurers in Asia, and could bid for assets
being sold by regional rivals AIA and ING, who need to raise cash to repay
government bailouts.

AXA’s shares jumped 3% on the news.

PULLOUT

Analysts say offloading its UK
operations could make sound financial sense for AXA.

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