SNS REAAL TO BUY AXA’S OPERATIONS IN NETHERLANDS

Netherlands-based financial services group SNS Reeal is to buy the Dutch insurance operations of France-based AXA. SNS Reeal is to pay €1.75bn in cash for the unit, and the transaction is expected to close in the second half of the year. SNS Reeal is to issue €350m in equity to help fund the acquisition. In addition, SNS Reeal’s majority shareholder Stichting Beheer SNS Reeal plans to sell up to €200m in ordinary shares, with an over-allotment option of €50m. AXA said that it was quitting the Netherlands, where its interests consisted of Axa Netherlands, Winterthur Netherlands and DBV Netherlands, because there were “limited possibilities to reach a leading position through organic growth”. It commented that the market was “highly competitive and dominated by large local players”. The earnings of the AXA units will be accounted for in net profit until the closing date. The sale is likely to generate an exceptional capital gain of about €400m. The non-life market in the Netherlands is led by Eureko, with a more than 20% market share in 2005.