Fitch affirms AXA ratings following propsed US$1bn acquisition

Fitch Ratings has affirmed AXA group's ratings, following the announcement of the proposed acquisition of MONY Group for an approximate US$1.5bn.

Fitch said it regarded the proposed acquisition as a strategic step in reinforcing AXA's position in growth markets worldwide, and strengthening its operating platform in the US. Fitch said the transaction was expected to close in the first half of 2004.

The ratings company said in a statement that the acquisition does not impact negatively on the group's financial profile from a balance sheet perspective.

AXA's proposed bid would be entirely financed with equity issued by AXA Group. If the bid was successful, Fitch said at the close of transaction it expected only a marginal impact on the group's capital adequacy and debt leverage. AXA Financial (AXF), the US holding company, would ultimately be the owner.

Fitch said the rating reflected its view of AXA's position as one of the world's largest providers of insurance and financial services benefiting from exceptional geographic diversification and key competitive advantages.

It added that the ratings were also based on the quality and conservatism of AXA's management team, which it said was pursuing a consistent strategy that supported the group's robust financial profile.

Fitch continued that these strengths were somewhat offset by capital adequacy and recovering ability that were lower than previously reported, but still very strong.