National Australia Bank has announced it has agreed binding terms with AXA Asia Pacific Holdings (AXA AP) and its French parent company, AXA SA, for the purchase of AXA AP’s Australian and New Zealand businesses.
The merger deal includes a purchase price of $4.6 billion for the Aust/NZ businesses, or $6.34 per AXA AP share, which is the same price offered by NAB in its initial bid in December 2009. This price trumps AMP’s initial offer of $$5.34 per AXA AP share, which was subsequently lifted to $6.22.
As part of the arrangement, AXA SA will acquire AXA AP’s Asian businesses for $9.4 billion.
The agreement of binding terms means the sale of AXA Aust/NZ to NAB will now be completed, subject to:
- Approval of the proposal by AXA AP minority shareholders
- Approval by the Federal Treasurer and APRA
- No objections to the merger by the Australian Competition and Consumer Commission (ACCC)
… a combined NAB/MLC/Aviva/AXA would hold a market share greater than the combined total of its two nearest rivals
While the merged entity would dominate retail superannuation, retirement incomes and retail managed funds, the area of greatest dominance would be in the individual life insurance sector, where a combined NAB/MLC/Aviva/AXA would hold a market share greater than the combined total of its two nearest rivals (CBA/CommInsure and ANZ/ING).
Dealer groups included in the proposed acquisition are:
- Genesys
- AXA Financial Planning
- Charter Financial Planning
- ipac
The acquisition terms will allow NAB the use of the AXA brand in Australia and New Zealand for up to two years, ‘…to assist with transition’.
NAB Group CEO, Cameron Clyne, said he was pleased with the progress that has been made in the acquisition process, commenting that the proposal “… provides the opportunity to enhance the access to competitive wealth management products and services within Australia and New Zealand.”
The ACCC is due to hand down its decision on NAB’s takeover proposal for AXA AP (as well as that of AMP’s bid) on 22 April, and the nature of its decision is likely to determine the outcome of the proposed acquisition.
