Dubai: Axa sold its Gulf business for $269 million to a Kuwait-based group, as the French insurance giant shifts its focus and exits some overseas investments to shore up its finances amid the pandemic. It sold stakes in Axa Gulf, Axa Cooperative Insurance Company and Axa Green Crescent Insurance Company to Gulf Insurance Group of Kuwait, in which Canada's Fairfax Financial Holdings Ltd. is a major shareholder.
Axa has been seeking to raise funds by divesting peripheral operations under CEO Thomas Buberl, who wants to focus on property and casualty insurance following a $15.3 billion purchase of XL Group Ltd. in 2018. It's also looking to shore up its capital buffers as the pandemic weighs on its profits.
"This transaction marks another step in Axa's continued simplification journey," Buberl said. The insurer has been mulling the sale of its business in Singapore and a general insurance venture in Malaysia. It's also held talks to sell its Greek business.
Series of divestments
As part of the Axa transaction, Gulf conglomerate Yusuf Bin Ahmed Kanoo will sell its shareholdings in Axa Gulf and Axa Cooperative Insurance Company. The total value of the sale to Gulf Insurance Group, which is expected to close by the third quarter of next year, is $475 million, according to a separate statement from the Kuwaiti company.
Gulf Insurance Group is acquiring a business that focuses predominantly on health and property insurance, with over 1,000 employees, 1 million customers through more than 30 branches and a sales footprint in Saudi Arabia, the UAE, Bahrain, Oman and Qatar.
Axa's earnings and gross revenues for its Gulf business in 2019 amounted to 25 million euros ($30 million) and 851 million euros respectively.
Gulf Insurance has one of the largest insurance networks in the Middle East and North Africa with companies in Kuwait, Jordan, Bahrain, Egypt, Turkey, Algeria, Syria, Iraq, Lebanon, Saudi Arabia and the Emirates. Its consolidated assets stood at $2.8 billion as of September 30.
