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
