Insurer AXA agrees to buy XL Group for around $15 bln

AXA, Europe's second-biggest insurer, has agreed to buy property and casualty insurance company XL Group for around $15 billion, in a deal which AXA said would create a world leader in its particular sector.

AXA said it was offering $57.60 for each XL share, representing a premium of 33 percent to XL's closing share price on March 2. The total consideration for the deal would amount to $15.3 billion.

"This transaction is a unique strategic opportunity for AXA to shift its business profile from predominantly life and savings business to predominantly property and casualty business, and will enable the Group to become the number 1 global property and casualty commercial lines insurer based on gross written premiums," said AXA chief executive Thomas Buberl.

"The transaction offers significant long-term value creation for our stakeholders with increased risk diversification, higher cash remittance potential and reinforced growth prospects. The future AXA will see its profile significantly rebalanced towards insurance risks and away from financial risks," he added.

AXA, which ranks as Europe's second-biggest insurer in terms of market capitalisation behind Germany's Allianz, said it would finance the XL deal via debt, cash and the proceeds of the forthcoming flotation of its U.S. unit.

It added it expected the XL takeover to be cash accretive, and to result in cost synergies of around $400 million per year, based on pre-tax earnings.

AXA also reaffirmed its 2020 financial targets, under which the French insurer aims to increase earnings per share by 3 to 7 percent a year over the 2016-2020 period.

(Reporting by Sudip Kar-Gupta; Editing by Kim Coghill/Bate Felix)