AXA (EPA:CS) - AXA to acquire the remaining 50% stake in AXA Tianping to accelerate its growth in China as the #1 foreign P&C insurer

Transparency directive : regulatory news

26/11/2018 17:49

Press release

Paris, November 26, 2018

AXA to acquire the remaining 50% stake in AXA Tianping to accelerate its growth
in China as the #1 foreign P&C insurer

* AXA is the first foreign insurer to own 100% of a top 20 P&C insurance
  company in China
* Full management control will allow AXA to accelerate its strategy in the
  largest growing market in Asia
* A unique combination of a pan-China presence, strong direct distribution
  capabilities and an international brand will position AXA to capture the
  significant growth potential of the P&C and health market in China

AXA announced today that it had entered into an agreement with the current
domestic shareholders(1) of AXA Tianping Property & Casualty Insurance Company
Ltd ("AXA Tianping") to acquire the remaining 50% stake(2) of the company.

Total consideration for the acquisition of the 50% stake would amount to RMB
4.6 billion (or Euro 584 million(3)), representing an implied 2.4x FY17 BV(4)
multiple, of which, subject to regulatory approvals, RMB 1.5 billion (or Euro
190 million(3)) should be financed through a capital reduction of AXA Tianping
to buy back shares from the current domestic shareholders.

"AXA Tianping represents a unique platform for AXA to capture fully the
significant growth potential of the P&C and health markets in China. By
leveraging its broad domestic presence, strong distribution capabilities, and
our international brand with global Health and P&C expertise, we look forward
to offering high-value products and services to our existing and potential
customers in China", said Thomas Buberl, Chief Executive Officer of AXA.

"This is a "first of its kind" transaction in the Chinese insurance market
whereby a leading P&C insurer, with a nationwide footprint, will be fully owned
by a foreign company. The acquisition further reaffirms our conviction that our
operations in China will be a key growth engine of the Group and in its
preferred segments."

(1) Shanghai Yi Ke Joint Venture Co., Ltd., Hainan Hua Ge Industrial Investment
Co., Ltd., Tian Mao Industrial Group Joint Stock Corporation, Hainan Luda
Technology Co., Ltd., Shanghai Rixingkang Biology Engineering Co., Ltd.
(2) AXA acquired the initial 50% stake in AXA Tianping in February 2014.
(3) 1 Euro = RMB 7.8767 as of November 23, 2018 (Source: Bloomberg).
(4) Chinese GAAP.

In 2017, AXA Tianping ranked 15th amongst China's P&C insurers with Euro 1
billion(5) of Gross Written Premiums (GWP), and is the only foreign invested
company in the top 20 P&C insurers in China. It is a leading company in Direct
Motor insurance (6th in the market(6)), with Motor insurance contributing 91%
of GWP, of which 41% is distributed through direct channels. It also sells
short-term health insurance products.

AXA Tianping has developed a national footprint with 25 branches and 93
sub-branches, covering 20 provinces which together generate over 85% of China's
GDP(7).

"The transaction marks another step towards consolidating our position as the
#1 foreign insurer in China and strengthening of our leadership in the Asian
region. With full ownership and management control of AXA Tianping, we will
further accelerate the deployment of our strategy to create a leading insurer
that champions healthcare and mobility solutions", said Gordon Watson, CEO of
AXA Asia

"Combining AXA Tianping's high-quality infrastructure with AXA's global
expertise in health and digital, will enable us to target selectively our
preferred customer segments to create more long term value in the motor
business, while capturing the rapid expansion of the health market by
developing a holistic wellbeing offer."

Completion of the transaction is subject to customary closing conditions,
including the receipt of regulatory approvals, most notably from the China
Banking and Insurance Regulatory Commission.

On the completion of the transaction, AXA Tianping will be fully consolidated
into the AXA Group's financial statements.

About the Chinese insurance market(8),(9)
The Chinese P&C insurance and health insurance markets have been growing
rapidly at 13% p.a. and 39% p.a. respectively, over the past 5 years. Despite
continuous growth, P&C insurance penetration remains low at 1.3%(10). Motor
insurance has been the dominant product, representing 74% of the market, with
new passenger car sales in China growing to 25 million, representing 8% CAGR
between 2014-2017. Agency and Direct are the main distribution channels in the
Chinese P&C insurance market.

(5) Converted at average FY17 EUR/RMB exchange rate of 7.6191 (Source:
Bloomberg).
(6) Source: China Banking and Insurance Regulatory Commission
(7) Source: Provincial Bureau of Statistics of China as of FY2017.
(8) Source: China Banking and Insurance Regulatory Commission, International
Monetary Fund, Swiss Re research, China Auto Industrial Research.
(9) As of FY17.
(10) As a % of GDP.

ABOUT THE AXA GROUP

The AXA Group is a worldwide leader in insurance and asset management, with
160,000 employees serving 105 million clients in 62 countries. In 2017, IFRS
revenues amounted to Euro 98.5 billion and IFRS underlying earnings to Euro 6.0
billion. AXA had Euro 1,439 billion in assets under management as of December
31, 2017.

The AXA ordinary share is listed on compartment A of Euronext Paris under the
ticker symbol CS (ISN FR 0000120628 - Bloomberg: CS FP - Reuters: AXAF.PA).
AXA's American Depository Share is also quoted on the OTC QX platform under the
ticker symbol AXAHY.

The AXA Group is included in the main international SRI indexes, such as Dow
Jones Sustainability Index (DJSI) and FTSE4GOOD.

It is a founding member of the UN Environment Programme's Finance Initiative
(UNEP FI) Principles for Sustainable Insurance and a signatory of the UN
Principles for Responsible Investment.

This press release and the regulated information made public by AXA pursuant to
article L. 451-1-2 of the French Monetary and Financial Code and articles 222-1
et seq. of the Autorité des marchés financiers' General Regulation are
available on the AXA Group website (axa.com).

THIS PRESS RELEASE IS AVAILABLE ON THE AXA GROUP WEBSITE axa.com

FOR MORE INFORMATION:
Investor Relations:           +33.1.40.75.48.42
Andrew Wallace-Barnett:       +33.1.40.75.46.85
François Boissin:             +33.1.40.75.39.82
Aayush Poddar:                +33.1.40.75.59.17
Shantanu Priya:               +33.1.40.75.58.44
Mathias Schvallinger:         +33.1.40.75.39.20
Alix Sicaud:                  +33.1.40.75.56.66

Individual Shareholder
Relations:                    +33.1.40.75.48.43

Media Relations:              +33.1.40.75.46.74
Julien Parot:                 +33.1.40.75.59.80
Nicolas Feltrin:              +33.1.40.75.56.48
Shruti Dhanda:                +33.1.40.75.72.58
Farah El Mamoune:             +33.1.40.75.46.68

Corporate Responsibility strategy:
axa.com/en/about-us/strategy-commitments

SRI ratings:
axa.com/en/investor/sri-ratings-ethical-indexes

IMPORTANT LEGAL INFORMATION AND CAUTIONARY STATEMENTS CONCERNING
FORWARD-LOOKING STATEMENTS

Certain statements contained herein may be forward-looking statements
including, but not limited to, statements that are predictions of or indicate
future events, trends, plans, expectations or objectives. Undue reliance should
not be placed on such statements because, by their nature, they are subject to
known and unknown risks and uncertainties and can be affected by other factors
that could cause AXA's actual results to differ materially from those expressed
or implied in the forward-looking statements. Please refer to Part 4 - "Risk
factors and risk management" of AXA's Registration Document for the year ended
December 31, 2017, for a description of certain important factors, risks and
uncertainties that may affect AXA's business and/or results of operations. AXA
undertakes no obligation to publicly update or revise any of these
forward-looking statements, whether to reflect new information, future events
or circumstances or otherwise, except as required by applicable laws and
regulations.

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