AXA sells investment arm to BNP Paribas for $6b

The sale is expected to drag AXA’s earnings by $440m.

AXA has entered into exclusive negotiations to sell its asset management arm, AXA Investment Managers (AXA IM), to BNP Paribas for $5.61b (€5.1b) in cash.

Financially, AXA IM will be classified as 'discontinued operations' in AXA’s financial statements starting FY24.

The sale is anticipated to reduce AXA’s underlying earnings by approximately $0.44b (€0.4b) annually but is expected to generate a one-off net income gain of $2.42b (€2.2b).

AXA plans to offset the earnings dilution with a share buyback of around $4.18b (€3.8b), to be launched immediately after the transaction's completion.

The transaction and share buyback are expected to have a neutral impact on AXA’s Solvency II ratio and no material effect on its key financial targets under the ‘Unlock the Future’ plan.

The transaction, expected to close by the second quarter of 2025, is subject to customary conditions, including employee consultations, the signing of a Share Purchase Agreement, and regulatory approvals.

Additionally, AXA would receive $0.33b (€0.3b) from the sale of Select to AXA IM before the transaction closes, bringing the total estimated value to $5.94b (€5.4b), representing a multiple of 15 times 2023 earnings.

The deal also includes a long-term strategic partnership where BNP Paribas would provide investment management services to AXA. The combined entity would manage $1.65t (€1.5t) in assets, making it a leading European asset manager.

AXA will maintain control over product design, asset allocation, and asset-liability management decisions.

($1.00 = €0.91)