PARIS (AP) _ Axa SA, scaling the ranks of global insurers since buying most of U.S.-based Equitable Cos., plans to acquire a larger French rival in a $9.3 billion deal that Axa said will make it the world’s No. 2 insurer.
The planned purchase of Union des Assurance de Paris, announced Tuesday, will create a company with revenue of about 313 billion francs, or $61 billion. Only Nippon Life Insurance Co. of Japan would be larger, Axa said.
UAP is the largest insurer in France and No. 2 in Europe behind Germany’s Allianz AG. Axa ranks right behind UAP. Both companies are mainly life insurance providers and offer other insurance and financial services.
The combination caps a rise for Axa propelled by its 1991 purchase of a 40 percent stake in Equitable, one of the world’s biggest insurance companies. Axa also has benefited from numerous acquisitions and joint ventures in Asia.
Axa now owns 60 percent of Equitable, which owns investment firms Donaldson, Lufkin & Jenrette Inc. and Alliance Capital Management LP, making Axa one of the top five fund management groups worldwide.
Tuesday’s deal will allow the larger but ailing UAP to end a two-year ordeal in which it has been trying to clean up numerous weak subsidiaries, as well as bad real estate and stock market investments.
UAP lost 2.1 billion francs last year, but is expected to turn a profit this year of around 1.6 billion francs.
Axa Chairman Claude Bebear said the companies will save 500 million francs next year and 1 billion francs in 1998 by merging.
UAP employs 51,000 people worldwide. Axa, which employs 37,000, said no staff cuts are planned.
Under terms of the deal, valued at 47.3 billion francs, Axa will swap shares and cash equal to 157 francs for each UAP share, a 34 percent premium over UAP’s closing share price of 320 francs Friday in Paris.
The companies requested trading of their shares be suspended Tuesday in Paris, but rumors of the merger had boosted UAP’s shares Friday. Trading will resume Thursday.
The French securities regulatory commission has asked the two companies for information on how news about their merger may have leaked, executives said.