French Insurance Gets A Polish Touch: AXA SA Acquires mBank
French Insurance Gets A Polish Touch: AXA SA Acquires mBank
French insurance group AXA SA has indicated that it has arrived at an agreement with the Polish bank mBank SA to purchase its property and casualty insurance business. The business is referred to as BRE Insurance and the deal is worth 136 million Euro which is around $175 million. The aim is to expand in the Central European country and spread further into the heart of it.
AXA has also agreed to a 10 year partnership distribution agreement with mBank. The Polish company will now have a long tenure with AXA SA, according to a statement by the French insurance group to the media. The transaction will now be complete depending upon whether the regulators provide the approval. An additional 7 million Euro may have to be paid by the French insurance group to the Polish bank as well when certain targets have been reached.
Mbank is currently Poland's forth largest bank and it has decided to sell its insurance arm keeping certain considerations in mind. AXA has indicated that the transaction involves a payment of 570 million zlotys.
The subsidiary of mBank named Aspiro is the shareholder of BRE Ubezpieczenia Towarzystwo Ubezpieczen i Reasekuracji S.A. (BRE TuiR) and it has reached an agreement with AXA about the agreement on the sale of 100% of shares of BRE TuiR. Following the fulfilment of certain conditions which are precedent to a 10 year distribution, this part of the transaction tool will be completed.
Some of the conditions which must precede the completion of this aspect of the transaction anaemly the formation of a 10 year distribution agreement between AXA SA and mBank, include the necessary approvals from the Competition and Consumer Protection Office (United Kingdom) or UKOKiK and KNF or the Polish Supervision Authority. The agreements form part of the long term cooperation between the two banks with respect to aspects such as distribution of life and property insurance products.
The complete payment to the mBank Group on the basis of the said agreements with AXA Group entities will be around PLN 570 million. Both the Bank and Aspiro will also be given an additional earn out consideration subject to achievement of certain targets of sales of life insurance products. The one off impact and result of this transaction on the mBank Group in terms of its consolidated pre tax profit is said to be around PLN 180 million.
“We came to the conclusion that the logical step after realising the full potential of BRE TUiR within the Group should be a strategic cooperation with a leading insurance company. AXA is a global leader in insurance and its proven track record in bancassurance in numerous countries gives us the confidence that we made the right choice “ Cezary Stypulkowski, CEO of mBank has been saying adding that “Our cooperation with AXA will translate into even wider product range and the best quality of service for customers of mBank Group. Clients will gain access to the state-of-the-art insurance products, offered via electronic and mobile platforms as well as traditional outlets. New mBank and its mobile version were created in order to provide our clients with a full range of financial products and services in a most convenient way possible – our strategic agreement with AXA is a natural step to fully leverage on the potential of Internet and mobile platforms.”
