The proposed acquisition is subject to regulatory approval
SBC Insurance (Asia-Pacific) Holdings Ltd, an indirect wholly-owned subsidiary of HSBC, has entered into an agreement to acquire 100% of the issued share capital of AXA Singapore for $575 million.
According to the press release, AXA Singapore is currently the 8th largest life insurer in Singapore by annualized new premiums and 5th largest property and casualty insurer.
AXA Singapore is considered to be a good fit with HSBC’s existing HSBC Insurance business.
Both businesses have products across the spectrum of insurance solutions and distribution channels. Meanwhile, AXA Singapore provides access to a sizeable tied-agency sales force, several independent financial advisory firms, and a large pool of insurance policyholders and corporate relationships.
The combined business would be the 7th largest life insurer (based on annualized new premiums) and 4th largest retail health insurer (based on gross premiums) with over 600,000 policies in-force covering life, health and P&C.
Following deal completion, the intention is to merge the operations of HSBC Life Singapore and AXA Singapore, subject to further approval by the Singapore regulator and courts.
The proposed acquisition will be funded from existing resources and will have a minimal impact on HSBC’s common equity tier 1 ratio. We expect the acquisition to be immediately accretive to the earnings of the Group upon completion.
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