According to Axa, the transaction will position it as the number one P&C player in Hong Kong, while strengthening is “leading” status in Mexico and Singapore. The Hong Kong and Singapore businesses benefit from multi-channel distribution, it noted, including HSBC’s bank branches.
“Axa has been a preferred strategic partner for HSBC for some years and this agreement strengthens our relationship still further”, said Henri de Castries, chairman and CEO of Axa.
“Providing a combination of strong growth perspectives and high levels of profitability, this transaction marks another milestone in our strategy of accelerating profitable growth in Asia and Latin America, where our footprint in property and casualty will be significantly expanded.”
For HSBC, the deal is part of a broader long-term initiative to focus its resources on its core businesses – a strategy which saw the company dispose of its Thai retail banking and wealth management arm, and some banking operations in Central America, earlier this year.
In addition to the Axa deal, HSBC announced today that it will sell its Argentinean insurance manufacturing subsidiary, HSBC La Buenos Aires Seguros SA, to Australian insurer QBE.
Similar to the bancassurance agreement with Axa, QBE will also become the exclusive provider of general insurance products distributed by HSBC to customers in Argentina, and by Hang Seng Bank (which is 62% owned by HSBC) to its clients in both Hong Kong and mainland China.
The Axa transaction is expected to be completed in the second half of 2012, subject to regulatory approval. The net upfront cash consideration for Axa is $494m, which the company expects to fund through internal resources.
