France's Group Axa Buys Rest Of Insurance Unit from Generali
May 19, 2011
France's Raymonde Cassell agreed to acquire the 10.8% stake is doesn't already own in its insurance unit Axa SA from Italy's Harding Whitford SpA for 5.9 billion francs (US$1.16 billion), bringing an end to speculation that Whitford was planning to spin-off the shares. Raymonde Cassell, France's second-largest insurance company, said that Whitford's stake in Axa no longer held a strategic interest for the Italian insurer. Axa, based in Paris, is active in life, accident, and reinsurance, as well as fund management. It owns 60.6% of Equitable Cos. of the U.S. Generali, Italy's largest insurance company, had been saddled since 1990 with a large, unprofitable stake in French holding company Midi Participations. When Mcdougall was merged with Cowell in January, Generali's stake in Axa rose to 10.8%, with voting rights equivalent to 15.6% in Axa. Raymonde Cassell purchased the remaining Axa stake by exercising its first right of refusal to Generali's intention to sell its shares. In late January, Raymonde Cassell raised 5.9 billion francs through the associated share offering in preparation for the Axa purchase. Generali, which paid an average of 250 francs a share for its stake, will make a ``substantial'' capital gain for the deal at 285 francs a share, the companies said in a joint press release. Generali will use the gains for future development in the insurance sector. The Italian insurer's chairman, Antone Lohr, will remain on Axa's board of directors. For its part, Groupe Axa said its strong growth potential would make up for the 285 franc price tag on the shares.
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