Dutch bank and insurer SNS Reaal said it will acquire the Dutch insurance operations of French insurer AXA SA for EUR1.75bn in cash
SNS REAAL N.V. and AXA S.A. have entered into a agreement concerning the acquisition of AXA’s Dutch insurance operations by SNS REAAL for a cash consideration of EUR1,750m (£1,185).
SNS REAAL will partly fund the acquisition with EUR350m of equity, for which it intends to launch an equity offering of new ordinary shares before the summer holiday period.
Its majority shareholder, Stichting Beheer SNS REAAL intends to sell up to EUR200m of existing ordinary shares and to grant an over-allotment option of up to EUR50m to the underwriters, concurrent with the offering of SNS REAAL. The combined offering of ordinary shares could therefore be up to €600m (including the over-allotment option).
SNS REAAL has entered into a binding Memorandum of Understanding to acquire AXA Nederland B.V., Winterthur Verzekeringen Holding B.V. and DBV Holding N.V. (‘DBV NL’), together referred to as ‘AXA NL Combined’, for a cash consideration of EUR1,750m plus accrued interest of 4% per annum as from January 1, 2007, the effective date of the acquisition. Profit will accrue to SNS REAAL from that date as well. The transaction is expected to close in the second half of 2007.
Sjoerd van Keulen, Chairman of the Executive Board: ‘This acquisition presents us with a unique opportunity to further strengthen our market position in the consolidating Dutch insurance market, which was our stated ambition at the time of the Initial Public Offering in May 2006. It will accelerate the execution of our strategy and will enhance our position as a leading insurance player in the Netherlands. In addition to nearly doubling our market share, the acquisition will significantly enhance the distribution power of REAAL Verzekeringen, including in key growth areas such as disability, pensions and SME. The strong operational fit, for instance related to back-offices, ICT and sales, will improve our operational efficiency. The acquisition will further diversify our business and will increase the relative size of insurance within our business mix.’