AXA and QBE will pay a combined cash consideration of $914 million for the acquisitions, HSBC said.

HSBC will sell its general insurance portfolios in Hong Kong, Singapore and Mexico to AXA Group, and its general insurance manufacturing business in Argentina to QBE.

Hang Seng Bank, held 62 percent by HSBC, will sell its general insurance manufacturing unit to QBE, according to the filing.

The assets to be sold to AXA has a gross asset value of $444 million and a net asset value of $48 million, while the assets to be sold to QBE are valued at $784 million gross and a net asset value of $189 million.

"The transaction with HSBC will help us accelerate our ambition to become the largest general insurance company in Asia and among the top three life insurance companies in the region by 2015," AXA regional Chief Financial Officer Francois Valery Lecomte told reporters at a media briefing on Wednesday noon in Hong Kong.

The consideration for the proposed acquisition from HSBC is about $494 million, the Paris-based insurer said. AXA will use its internal funds to settle the transaction, Lecomte said.

HSBC and Hang Seng Bank have also forged a 10-year agreement with AXA and QBE, under which the latter two firms will become the exclusive providers of general insurance products distributed by HSBC and Hang Seng Bank to retail banking and commercial banking customers in Hong Kong, China, Singapore, India, Indonesia, Mexico and Argentina.

AXA will become the exclusive provider of general insurance products to HSBC customers in Hong Kong and China (excluding customers of Hang Seng Bank and HSBC's Chinese rural banks), Singapore, India and Indonesia. It will also provide property and casualty insurance products to HSBC customers in Mexico.

Under AXA's agreement with HSBC, the former will gain access to the latter's clients in five key markets, namely Hong Kong, Singapore, China, India and Indonesia, Lecomte said.

Upon completion of the deal, AXA will become the No. 1 general insurance company in Hong Kong, with its market share more than doubling to 13 percent from 6 percent. Its market share in Singapore will also expand to 12 percent from 10 percent.

"Asia is the main growth engine for the AXA group, and the region accounts for 10 percent of the profit and contributes 25 percent of sales of life insurance," Lecomte said.

AXA plans to set up an integration team to complete the consolidation within the next six to 12 months, said Stuart Harrison, chief executive officer of AXA's China unit. He said AXA will keep about 500 employees of HSBC's general insurance unit , including 240 staff in Hong Kong.

QBE will become the exclusive provider of general insurance products to HSBC customers in Argentina and to Hang Seng Bank's customers in Hong Kong and China.

Under the 10-year bancassurance arrangements, AXA and QBE will pay commissions on product sales and may make profit-related payments to HSBC group's companies and Hang Seng Bank.

The transactions, which are subject to regulatory approvals, are expected to be completed during the second half of 2012, although the transaction in Argentina may be completed earlier.

FROM: AGENCIES