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AXA to sell its wrap platform business (Elevate) to Standard Life

05 May 2016

AXA announced today that following a strategic review conducted by AXA UK of the UK Life & Savings market, it has agreed to sell its wrap platform business (‘Elevate’) to Standard Life plc. This transaction follows the announcement made on April 28th for the disposal of its UK offshore investment bonds business (‘AXA Isle of Man’).

Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and is expected to occur in the second semester 2016.

AXA also confirms that it is engaged in discussions for the disposal of its remaining UK Life & Savings assets, namely its direct protection business (‘SunLife’) and its traditional (non-platform) investment and pension business.

There is no certainty these discussions will result in a further transaction being signed or, if signed, that the transaction will ultimately be completed. If agreed, this transaction would be subject to a number of conditions including the receipt of regulatory approvals.

AXA UK Property & Casualty, Health and Asset Management (‘Architas’) operations are not included in the scope of the strategic review, nor of these transactions.

Paul Evans, Chief Executive Officer of AXA UK commented: “Following the successful achievement of our Ambition AXA five-year strategic plan, we have reviewed the strategic benefits of pursuing our activities in the UK Life & Savings market. After detailed consideration, we have come to the conclusion that these businesses could be even more successful if supported by organisations with a stronger strategic focus on the Life & Savings segment. These transactions would allow AXA to rebalance the focus of its UK activities towards Property & Casualty, Health and Asset Management.”

“I would like to take this opportunity to thank the teams for their valuable contribution to building strong, innovative and market leading businesses over the past years.”

The overall consideration for the sale of the UK Life & Savings businesses included in the contemplated transactions is currently expected to amount to ca. GBP 650 million (or ca. Euro 830 million[1]). In the event that the parties reach a definitive agreement and the transactions are completed, they would generate an exceptional negative P&L impact of ca. Euro 0.4 billion accounted for in net income[2].

AXA operates through a number of business units in the UK, including AXA Wealth, AXA Insurance, AXA PPP healthcare, AXA Ireland and an independent distribution business Bluefin. UK Life & Savings business is composed of AXA Wealth, which has been a turnaround success in the last years, and SunLife, which is the market leader in the Over-50 protection market. On the Property & Casualty side, AXA insurance offers mostly motor, travel and house covers. With nearly 75 years of experience, PPP healthcare is one of the largest and most experienced private medical insurance providers in the UK, benefiting from a network of over 250 hospitals.

Fenchurch Advisory Partners is pleased to have advised AXA on the sale of its wrap platform business and UK offshore investment bonds business.

Notes:

[1] EUR = 0.78516 GBP as of May 2, 2016 (Source: Bloomberg)

[2] As previously communicated, AXA also expects to realize an exceptional gain of ca. USD 1.1 billion (or ca. Euro 1.0 billion) after tax on the disposal of two real estate properties in the US, which will be accounted for in Net Income during the first half of 2016.

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