AXA raises $3.2bn from pre-IPO restructuring to finance XL acquisition

French insurer AXA has received $3.2 billion following the completion of its reorganisation transactions ahead of the planned initial public offering (IPO) of its US operations.

AXA said the proceeds would help finance its acquisition of re/insurer XL Group, a $15.3 billion all-cash deal for which AXA has agreed to pay significantly more than other suitors.

According to the statement, the restructuring deal included the repayment of all internal loans provided by AXA Group and the purchase of Alliance Bernstein units previously owned by AXA and its affiliates.

Earlier in March, rating agency Fitch had threatened to downgrade AXA following the plan to acquire XL Group due to financing risks related to the planned IPO of AXA’s US subsidiary.

AXA said it expects to finance the cash consideration via €3.5 billion available cash resources, €6 billion from the IPO of AXA's US operations (Life & Savings and Alliance Bernstein) planned in the second quarter of 2018, and related pre-IPO transactions and €3 billion via issuance of subordinated debt.

The target completion period for the acquisition is the second half of 2018, subject to regulatory approvals and approval by XL shareholders.

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