French insurer Axa said today it would bid $2.2 billion to buy out its Australian affiliate.
Axa is bidding A$3.75 a share for the 48.3 per cent of Axa Asia Pacific it does not already own, half in cash and half in stock. The affiliate is Australia's second-biggest life insurer.
"The acquisition of Axa Asia Pacific is a good acquisition because the business in Hong Kong has high profit margins . . . with good growth prospects," said Mr Nick Holmes, an analyst at Lehman Brothers in London.
The offer for Axa Asia Pacific, aimed at boosting revenues from the region, comes a month after Axa's $1.5 billion purchase of US life firm MONY and should aid growth at the Paris-based insurer, analysts said.
The move came as it posted a sharper-than-expected first-half profit gain on better property and casualty results.
Axa said the acquisition of MONY, to expand its presence in the large US market, would add $170 million to $195 million to after-tax 2005 underlying earnings.
"Axa is profiting from these good results to make the (Asia-Pacific) offer," said Mr Pierre Bucaille, an analyst at Fideuram Wargny in Paris. "It is strategically a good operation."
Still, Axa shares eased, losing 0.4 per cent to €16.69.