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Axa, AMP sign 'binding terms' over sale of Australasian units

Monday 29th November 2010

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Axa Asia Pacific Holdings and its parent Axa SA have signed binding transaction documents with rival wealth manager AMP to sell its New Zealand and Australian businesses for some A$13.3 billion in cash and scrip.

The two fund managers need regulatory approval in Australia, though this isn't likely to be a problem after the Australian Consumer and Competition Commission talked down a veto when it blocked National Australia Bank's bid for the Axa units. Under the proposed scheme of arrangement, minority shareholders of AXA AP would get at least A$6.43 a share in stock and cash. The offer is for 0.73 AMP stock and a variable amount of cash, based on the weighted average trading price of AMP's shares.

"The independent directors continue to unanimously recommend the proposal, in the absence of a superior proposal and subject to the opinion of an independent expert," Axa AP chief executive Rick Allert said in a statement.

AMP got a second bite at the cherry after regulators blocked NAB's efforts to buy the wealth manager. The bank came in as a late bidder in December 2008 when AMP looked like it had already managed to secure the deal.

Under the offer, AMP will buy the entire unit and sell back the Asian businesses to the French parent Axa SA. The deal is expected to close early next year.

Jack Regan, managing director at AMP Financial Services New Zealand , said the merger will shore up the insurance unit's second-place position in the market behind ASB's Sovereign Assurance Co., and will give it a market leading position in retail and workplace savings.

"The increased scale of the business will allow greater investment in the ongoing development of products and services that will ensure we continue to meet the needs of customers and advisers," he said in a statement.

Shares in AMP were unchanged at $6.52 in trading on the NZX, and fell 0.6% to A$5.08 on the ASX. Axa AP shares were unchanged at A$6.20.

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