The company said it had sold Axa Wealth’s non-platform pensions and investments business along with SunLife, its direct protection business, to Phoenix for £375m ($550m, €492m) in cash.
Completion of the deal is still subject to regulatory approvals.
Following the earlier sale of its Isle of Man-based offshore investment bonds business to Life Company Consolidation Group (LCCG) in April, and its decision to sell the UK platform business Elevate to Standard Life this month, Axa said it had now sold its entire UK life & savings business for around €800m (£610m, $894m).
Axa’s investment arm Architas was not part of the deal and will move to the group’s wider global life and savings division.
End of an era
Paul Evans, the outgoing chief executive of Axa UK & Ireland said: “I would like to warmly thank the UK life & savings teams in Axa Wealth and SunLife who have accomplished so much over recent years. They can be very proud of what they have achieved, and I wish them all the very best for the future.”
“The acquisition of the Embassy and SunLife businesses represents another important step forward in Phoenix’s growth strategy.”
Under the Axa reorganisation Evans is to become the chief executive of Axa Global Life & Savings and of Axa Global Health from 1 July, when a new group management committee takes running the company.
For Phoenix, the acquisition of the two Axa units, Embassy and SunLife, will add £12.3bn of assets under management and over 910,000 policies to its operation.
The company said it expected the benefits from the deal to include net capital synergies of around £250m within six months of completion, including cost savings of £10m a year.
It is also expected to generate cash flows of approximately £300m between 2016 and 2020 and £200m from 2021 onwards.
The acquisition will also support a plan by the management to increase the 2016 final dividend by 5% to 28p a share, equivalent to 56p a share on an annualised basis.
“The acquisition of the Embassy and SunLife businesses represents another important step forward in Phoenix’s growth strategy,” said Phoenix’s group chief executive Clive Bannister.
“We will invest heavily to ensure a smooth transition of the two businesses from Axa to Phoenix and we are committed to delivering the highest level of service to both direct and IFA customers, as we do for our existing customers,” Bannister said.
“Looking ahead, we believe there will be further consolidation in the UK life industry and we will continue to explore further opportunities as they arise.”
Axa’s new reorganisation will see the company based in future along four business lines - Asset Management, Health, Life & Savings and Property & Casualty – led by the newly-appointed 10-member management committee under the incoming chief executive Thomas Buberl, who formerly takes on the role from 1 September this year.
The new committee includes six new names and three former members of the existing group plus Buberl.
The six new members, who are all drawn from existing staff, are:
- Benoît Claveranne who is group chief transformation officer,
- Paul Evans who is chief executive of Axa Global Life & Savings and of Axa Global Health,
- Gérald Harlin, who is group chief financial officer,
- Gaëlle Olivier who is chief executive of Axa Global P&C,
- Jacques de Peretti who is chief executive Officer of Axa France, and
- George Stansfield who will be group general secretary, with responsibilities including human resources.
The three members of the current Management Committee, whose roles have been renewed are:
- Jean-Louis Laurent Josi, chief Executive of Axa Asia,
- Mark Pearson, chief Executive of Axa US, and
- Véronique Weill who has been appointed group chief customer officer and chief executive of a newly created business line Axa Global Asset Management.