France’s AXA Group moved a step closer to closing on its acquisition of XL Group as Nw York insurance regulators have given their approval of the deal.
New York’s Department of Financial Services (DFS) on Friday announced it had approved an application by AXA Group, including AXA SA, to acquire XL Insurance Co. of New York and XL Reinsurance America. Each is a New York domestic stock property/casualty insurance company, which requires DFS approval for the proposed change of control.
The ratification of the agreement is still subject to other legal approvals and closing conditions. Insurer XL Group’s shareholders have already confirmed the deal. The transaction is expected to be completed before the end of this year.
Maria T. Vullo, New York’s chief executive, said DFS had approved the purchase as “fulfilling the requirements” of the state insurance law.
“This acquisition further demonstrates the commitment of New York’s insurance market and the commitment of major corporations to New York’s strong market and strong regulation,” Vullo said.
DFS said AXA is assuring operational plans and ongoing DFS auditing.
AXA has financed the acquisition of XL Group for 12.4 billion euros ($ 14.9 billion) and does not depend on any additional debts.
At the end of 2016, the AXA Group of Companies was the largest insurance group in the world, with total assets of 870 billion euros and gross revenues of 98.5 billion euros, according to a 2017 annual report. In May, AXA Equitable Holdings, which includes AXA’s US operations, earned $ 2.75 billion on the public offering.
The New York XL companies to be acquired provide significant reinsurance capacity in the US insurance market. According to the 2017 annual reports, the XL Insurance Company of New York and XL Reinsurance America has total assets of $ 6.2 billion and gross revenues of $ 981.3 million.
While AXA will acquire XL companies through merger, AXA will continue to operate in a new division within the company. AXA said it plans to protect XL assets and maintain its current XL business model and that XL companies will not have a significant change in their US business.
After completion of the transaction, XL Group, combined operations of AXA Corporate Solutions (AXA’s major commercial property / casualty and private business) and AXA Art will be managed by Greg Hendrick, now president and general manager of XL Group. The committee should be appointed as CEO of the organization and be a member of the management committee of AXA Group. This division can be called AXA XL.
Hendrick will report to AXA Group CEO Thomas Buberl.
XL Group’s Chief Executive Officer Mike McGavick will be the AXA XL Vice President and will be the exclusive consultant on integration with Buberl and other strategic issues.
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