AXA targets Asia growth in spite of China snag

By Denny Thomas and George Chen

SYDNEY/HONG KONG (Reuters) - French insurer AXA sought full control of its majority-owned Asian arm to get a tighter grip on the region's booming markets and stuck with plans to grow in China despite regulatory obstacles there.

The insurance market in Asia is growing faster than Europe and the United States, with Ping An Insurance and China Life among the top players in the region.

As part of its strategy to grow in Asia, AXA announced a two-stage deal on Monday to ultimately acquire full control of AXA Asia Pacific's most lucrative Asian operations.

First, AXA's regional Australian partner AMP will buy all of AXA Asia Pacific, including the 54 percent owned by parent AXA, in a deal valuing the target at about $10.3 billion.

AMP will then sell most of the business to AXA for about $7 billion, while keeping the Australian and New Zealand units. AXA said the deal would result in it making a net cash payment of 1.1 billion euros ($1.65 billion) for the Asian parts of AXA Asia Pacific.

AXA Asia Pacific rejected the proposal, saying it undervalued the business, but analysts said it was likely the parties involved would find an agreement.

The deal has an implied value of A$5.43 ($5.03) per AXA Asia Pacific share. The stock soared 32.5 percent to A$5.70.

AXA Chief Executive Henri de Castries said he was ready for further talks. "Our offer is a reasonable one, and we are always ready to talk," he told reporters.