AXA has entered into an agreement to acquire a 7.15 percent stake in African Reinsurance Corporation, the leading reinsurance company in Africa.
Under the terms of the agreement, the total cash consideration payable at closing would amount to USD$61 million (53 million euros).*
Africa Re is the number one reinsurer in Africa, operating across the continent, AXA said. Africa Re was founded in 1976 by the member states of the African Union and the African Development Bank (ADB).
Africa Re’s current shareholding comprises 41 member states, the ADB and more than 100 African insurance and reinsurance companies, together holding a 75 percent stake in the company, as well as other development finance institutions and strategic partners.
Africa Re is a growing and profitable company, with gross written premiums of 505 million euros and net income of 64 million euros in 2013, AXA said.
Africa Re has strong reinsurance market shares across the continent, notably in countries identified as key priorities for AXA, such as Nigeria and Egypt. This transaction would allow AXA to increase its exposure to the fast growing reinsurance and insurance markets in Africa, in line with its “Ambition AXA” strategy, by participating in the successful and profitable development of Africa Re.
Moreover, AXA said it expects to benefit from the extensive knowledge of the local markets and the expertise of Africa Re’s management team.
“This transaction is another step in our African strategy and follows on from our recent acquisition of Mansard in Nigeria and our partnership with the World Bank Group’s International Finance Corporation,” Denis Duverne, deputy chief executive officer of AXA. “It allows us to increase our pan-African exposure and to benefit from the knowledge of an experienced and successful partner.”
At the same time, this move confirms AXA’s commitment to the African continent, Duverne said, where “insurance has a crucial role to play in promoting economic development, due to its contribution to improving risk management, protection and prevention.”
*Exchange rate used on February 19, 2015: EUR 1 = USD 1.137
Source: AXA Group