XL XL Fleet Corp

By Matthew Dalton 

PARIS -- French financial giant AXA SA on Monday said it would buy New York-listed insurance company XL Group Ltd. for $15.3 billion, creating one of the world's biggest property and casualty insurers.

The d eal marks another step in AXA's plan to cut its exposure to financial markets and focus more on insurance.

In light of the XL deal, Paris-based AXA said it would accelerate existing plans to spin off its large U.S. life-insurance business in a public offering. That division owns a majority stake in AllianceBernstein, a money manager struggling against competition from cheaper index funds.

XL, which generated revenue of $11 billion last year, bolsters AXA in a core business area as it steps away from its U.S. operations and allows it to cut costs and boost revenue.

"It is a fundamental reshaping of our business," Chief Executive Thomas Buberl said.

Shareholders in XL will receive $57.60 a share, which represents a 33% premium to the company's closing price on Friday.

To finance the deal, AXA said it would use EUR6 billion in proceeds from the upcoming IPO of its U.S. business, EUR3 billion in cash and issue EUR3 billion in debt. AXA filed for the offering of the U.S. business, AXA Equitable Holdings, in November with U.S. regulators, though shares have yet to be sold to the public.

"This means we intend to progressively sell down the AXA Group's stake in AXA Equitable Holdings over the next couple of years subject, of course, to market conditions," Mr. Buberl said.

AXA and XL's boards have both approved the deal but the transaction remains subject to approval from XL's shareholders and regulators.

--Nathan Allen contributed to this article.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

(END) Dow Jones Newswires

March 05, 2018 04:04 ET (09:04 GMT)

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