Intact Financial Corp. (IFC.T) announced a definitive agreement
to buy AXA Group's Canadian affiliate for C$2.6 billion (US$2.66
billion).
The Toronto-based insurer said the purchase will boost its
direct premiums by C$2 billion to more than C$6.5 billion. AXA
Canada is the sixth largest home, auto and business insurance
company in Canada, it said.
Intact will fund the purchase with C$500 million of its own
excess capital and through the issue of about C$800 million of
equity. It will also access credit facilities of C$1.3 billion.
It expects to maintain a strong capital position after the
purchase and added that it sees annual synergies of more than C$100
million from a combination of systems-related cost savings and
other efficiencies.
AXA Canada parent AXA SA (CS.FR) is expected Wednesday outline
details of an ambitious five-year strategy, which it launched late
last year. The French insurance giant aims to show investors it's
on track to expand again in the aftermath of the financial
crisis.
Intact, meanwhile, said it expects to increase its profitability
and to benefit from greater earnings stability resulting from a
wider diversification of its activities across the country and
across business lines.
-By Carolyn King, Dow Jones Newswires; 416-306-2100;
carolyn.m.king@dowjones.com