European insurer AXA has announced that it is to purchase XL Group (XL), a property and casualty insurer based in Bermuda, for US$15.3 billion. This represents $57.60 for each XL share. The move, said Thomas Buberl, Chief Executive of AXA, ‘offers significant long-term value creation for our stakeholders with increased risk diversification, higher cash remittance potential and reinforced growth prospects’. “The future AXA will see its profile significantly rebalanced towards insurance risks and away from financial risks,” he said.
Response was muted, however, with AXA shares falling by five per cent and some analysis suggesting that the purchase price was overly high.
AXA primarily deals in life and savings products, and the purchase will likely move it into a strong position in the global property and casualty market.