French financial giant company AXA said it would acquire New York-listed insurance company XL Group Ltd. for $15.3 billion.
AXA moved to acquire Bermuda based XL Group to expand is business, to become a world leader in property and casualty insurance.
Europe’s second-biggest insurer group offered $57.60 for each XL share. AXA said buying XL would result in rising of AXA’s property and casualty insurance.
Buying XL will support AXA in a core business area as it steps away from its U.S. operations and allows it to cut costs and boost revenue.
Chief Executive Officer of AXA, Thomas Buberl said that they are fundamentally reshaping their company for future growth.
Financial deal between AXA and XL
In this financial deal, AXA said it would use EUR6 billion in proceeds from the coming IPO of its U.S. business, EUR3 billion in cash and issue EUR3 billion in debt. AXA filed for the offering of the U.S. business, AXA Equitable Holdings.
The deals agree with Buberl’s plan to focus on products that require technical expertise and regular customer contact, which will allow the firm to sell additional policies to the clients.
Mr. Buberl said that they intend to progressively sell down the AXA Group’s stake in AXA Equitable Holdings over the next couple of years subject to market conditions.
Both the board members of AXA and XL’s have approved the deal but the transaction remains subject to approval from XL’s shareholders and regulators.