AXA has confirmed an agreement with QBE Insurance Group for the sale of Winterthur's US operations for $1.15bn (€920m). In addition, Winterthur US will repay $636m (€506m) of inter-company loans to Winterthur Group.
The move comes after AXA's announcement in June 2006 that it had put Winterthur US operations under strategic review.
A 2006 estimate of gross written premiums for Winterthur US operations put the figure at $1.5bn and net income at $81m.
AXA added that the "synergy targets" for the integration of Winterthur Group would not be affected by this move as they did not include any cost savings from Winterthur US operations.
The acquisition will form part of QBE the Americas under Tim Kenny, president and chief executive officer.
Frank O'Halloran, QBE Group chief executive officer, said: “Winterthur US gives us a strong footprint in western, mid-west and north-east US states for small to medium property and casualty business through a large base of independent agents. By contrast, the Praetorian acquisition announced in December will more than double the size of our US specialist insurance program business.”
He added: “... [W]e anticipate profit after tax of
$160m from Winterthur US in the first full year before the cost of funding and synergies.”
The transaction is expected to close during the second quarter of 2007.
