(Boursier.com) — AXA Germany has reached an agreement with Athora Deutschland GmbH (Athora Germany), an insurer licensed in Germany, relating to the sale of a portfolio of 16 billion euros of life insurance and pension contracts in Germany.
The portfolio has not been open to new business since 2013 and is mainly composed of traditional general fund contracts, with an average guaranteed rate of 3.2%.
The reduction of guarantees on the balance sheet ofAXA resulting from the sale will further reduce the Group’s exposure to financial market risks.
Under the terms of the agreement, AXA Germany will sell the portfolio to Athora Germany, for an amount of 660 million euros, representing an 18x multiple of 2022E earnings.
The operation will result in a total amount in cash net of tax estimated at 0.4 billion euros for AXA SA AXA intends to compensate for the dilution of profits resulting from the disposal by a share buyback which will be launched after the closing of the operation.
As part of the transaction, AXA IM will enter into an agreement to provide asset management services to Athora until 2028.
AXA and Athora are committed to ensuring a smooth transfer of the portfolio and, as such, AXA Germany will provide administrative support services to Athora Germany until 2028. Thereafter, Athora Germany will take over contract management, with all warranties, terms and conditions unchanged.
The sale will have a non-material impact on the net income of the AXA Group in the 1st half of 2022. The transaction is expected to reduce the operating income5 of the AXA Group by around 36 million euros per year from 2023.
The sale will have a non-material impact on the Solvency II ratio of the AXA Group.
The transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and is expected to close in the fourth quarter of 2023.
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