This time, AXA again on the offensive. The French announced yesterday the purchase of the insurer Winterthur to Credit Switzerland. A transaction of EUR 8.9 billion in total to step ahead for the first time rival Allianz at the top of European insurers in terms of activity. "There was not more beautiful opportunity that Winterthur insurance market", said a Henri de Castries smiling, yesterday, the Conference of joint press with his counterpart from Credit Switzerland, Walter b. Kielholz.
Between the two groups, the negotiations were long and tightly their first contacts date back to 2004. But on Wednesday, in Zurich, the atmosphere is rather relaxed. The two patterns share a laugh and to send flowers. "Yesterday evening Tuesday, there is a game void between the French and the Swiss to the world of football: no winner, no loser." "Today, between AXA and Credit Switzerland, there are two winners", fun Henri de Castries in impeccable German. "Thank you, monsieur de Castries told Walter b. Kielholz." You handle the language of Goethe better than many of the French-speaking Swiss.
Change of gear ratio
With this operation, AXA strengthens its role claimed of "Consolidator" in an industry that seems ripe for a new wave of concentration. By putting his hand on Winterthur, the French insurer does not really change dimension but clearly change gear: this is its biggest operation since 2000. Present in 17 countries and strong 13 million customers, Winterthur is one of the first 10 European General insurers. He is very strong in Switzerland (number one for damages, number two in life), where AXA had only a confidential role. He holds positions of second part of table Germany, Spain, the Benelux and the United Kingdom, countries where the French insurer will strengthen its positions. Winterthur is also present in several countries in Asia or Eastern Europe markets that are promising.
In total, the French insurer will have to pay $ 8.9 billion to the subsidiary of the Credit Switzerland since added to the 7.9 billion of the purchase price is 1 billion euros of debt recovery, all financed by an increase in capital of 4.1 billion and loans of 4.8 billion. The issuance of new shares will take place from 19 to 30 June. According to & Standard Poor's, which has scaled view attached to the notes of AXA, the group retains a good financial flexibility with this balance between use of debt and capital increase.
38, Its debt ratio should increase by about 3 points only. From a financial point of view, the operation should have a positive impact of 7 on earnings per share as of 2009. Cost synergies are estimated at EUR 280 million before tax "in cruise regime", but "no synergy income was taken into account at this stage", says the group.
The stock market booked a home instead measured in operation. Down 3 from the opening, the action AXA declined finally 1.77 to 23.87 euros. Access of weakness that it is difficult to isolate the context of bearish the market is to almost 15 decline in its course scholarship since a little more than two weeks. Analysts have expressed some reservations on the price of the transaction, which represents 11.6 times the net result 2005 published by Winterthur and 1.3 times its own funds. A slightly higher level than what they waited on average. By contrast, the title of Credit Switzerland, vendor, has been very surrounded. He won 1.35, investors welcoming that the Swiss group should finally end his unhappy adventure in bancassurance.
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