Divestment of AXA's Central European operations

  •   10/02/2020 - 16h05
  •   HARMANT Adeline

The AXA Group announced this morning that it has sold its activities in Central Europe, and more specifically in Poland, Czech Republic and Slovakia, to its Austrian counterpart, the Uniqa Group. An operation that brings the French group a billion euros. Let's go back over this agreement and its repercussions for the company and its share on the stock market.

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Divestment of AXA's Central European operations
Image copyright: Laurent Grassin - Flickr

An agreement of more than one billion euros for the AXA Group :

In a press release published this weekend, the AXA Group announced that it has just sold its activities in Central Europe for a total of one billion euros to its competitor and counterpart Uniqa, an insurer based in Austria.

As part of this agreement, the AXA Group is selling all of its life and savings, property-casualty and retirement insurance businesses in various countries in this zone, including Poland, the Czech Republic and Slovakia. The AXA Group expressed its views on this subject, explaining that this agreement is "another important step in the simplification of the Group's profile". However, the activities of AXA XL and AXA Partners subsidiaries in these three countries are not affected by this transaction.

However, it will be in the fourth quarter of 2020 that this sale will be finalized. It will thus make it possible to strengthen the group's balance sheet but also to improve the company's economic solvency ratio by an average of around 2 points.

However, there will not be a sufficiently significant impact of this transaction on the Group's net income as estimated by the company in the context of this press release. In 2018, the group published a net profit divided by almost three, notably due to the weight of an exceptional charge estimated at 2.1 billion euros.

In more detail, AXA's revenues in Poland reached 585 million euros in 2018, while revenues in the Czech Republic and Slovakia represented 170 million euros, all operations combined, over the same period.

 

The benefits of this transaction for the Uniqa Group :

Of course, this transaction will also be profitable for the Austrian insurer Uniqa, which is particularly well established in Eastern Europe. The company expects to gain nearly 5 million new customers, as well as more than 2,000 employees and 800 million euros in additional insurance premiums, as mentioned in another press release.

The current head of the Austrian insurance company said: "We will considerably improve our position in each of these markets."

The AXA Group is expected to release its financial results on or about February 20. However, it should be noted that last December, the Group announced that it had finalized the takeover of its property-casualty insurance joint venture in China, AXA Tianping, for nearly 590 million euros, which enabled it to break into the Chinese market.