AXA To Pay EUR240 Million To Extend Italy Bancassurance Venture

French insurance company AXA SA (AXA) said Wednesday it would pay EUR240 million to Italy's Banca Monte dei Paschi di Siena (BMPS.MI) to extend their bancassurance joint venture to include 1,000 more bank branches.

The branches belonged to Banca Antonveneta, which was taken over by Monte dei Paschi.

The move increases AXA's presence in the lucrative Italian market where it is often linked to rumors that it has ambitions to take over a local insurance player such as Assicurazioni Generali SpA (G.MI).

More recently, it was reported to be in talks with Fondiaria-SAI (FSA.MI), Italy's largest non-life insurer. The Italian insurer's chief executive officer, Fausto Marchionni, said the company was "unwilling to be a takeover target."

The extended AXA and Monte dei Paschi insurance joint venture lifts their current network of Italian bank branches to 3,000 from 2,000, reaching an additional 1.6 million potential clients.

The two companies launched the joint venture in 2007, when AXA agreed to pay EUR1.15 billion to acquire a 50% stake in the Monte Paschi life and savings unit MPS Vita and MPS Danni.

Monte dei Paschi later acquired Antonveneta to become Italy's third-largest retail bank. The deal announced Wednesday follows the termination of an exclusive bancassurance agreement between Antonveneta and its historical partner.

The Italian bank has agreed to sell 150 branches in return for the antitrust regulator's approval to buy Antonveneta.

The AXA MPS joint venture had an 8% share of Italy's life bancassurance market in 2008, with gross written premiums of EUR3 billion and underlying earnings of EUR70 million.

AXA is currently mulling a A$13 billion takeover offer from National Australia Bank Ltd. (NAB.AU) for its wealth protection firm, AXA Asia Pacific Holdings Ltd. (AXA.AU). It rivals an earlier offer from AMP Ltd. (AMP.AU).

At 0823 GMT, AXA shares were up EUR0.38, or 2.6% at EUR14.79, outperforming the Stoxx Europe 600 insurance index, which was up 1.8%.

Monte dei Paschi shares were up 1% at EUR1.13.

-By Digby Larner, Dow Jones Newswires; +33 1 4017 1748; digby.larner@dowjones.com

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