National Australia Bank to buy Axa Asia, trumping AMP

National Australia Bank Ltd bid A$13.3 billion ($12 billion) for Axa Asia Pacific Holdings Ltd, scuttling AMP Ltd’s joint offer with French insurer Axa SA and winning approval from the wealth manager’s independent directors.

The bank offered A$6.43 a share for Axa Asia Pacific, beating the A$6.22 bid by AMP and Axa SA, which owns 54 per cent of Axa Asia Pacific. The deal is conditional on Axa SA’s agreement to buy Axa Asia Pacific’s units in eight Asian countries, according to a statement today.

The deal leaves AMP, Australia’s second-largest asset manager, empty-handed after what it called its “best and final” bid was rejected today. National Australia Bank is paying A$4.6 billion for Axa Asia Pacific operations in Australia and New Zealand, adding to assets acquired in its purchase of Aviva Plc’s local units in June.

“It will be a lot of work over the next three years digesting this,” said Prasad Patkar, who helps manage $1.6 billion at Platypus Asset Management in Sydney. National Australia Bank shares slumped 4.7 per cent to A$26.65 in Sydney. Axa Asia Pacific shares jumped 13 per cent to A$6.37, while AMP rose 4.1 per cent to A$6.35.

Having increased their share of the nation’s housing loan market throughout the global financial crisis, Australian banks are now snapping up asset managers in a nation that dodged the global recession.

National Australia Bank’s managed assets in Australia and New Zealand would swell to A$144.3 billion if the deal is completed. Axa SA, France’s biggest insurer, would win full control of its business in Asia, where wealth is growing faster than in any other region.

Stock sale
National Australia Bank will sell A$1.5 billion in stock next year to help fund the purchase, Chief Executive Officer Cameron Clyne said. He said he expected the acquisition would be completed in the second quarter, barring any regulatory hurdles.

AMP is “considering” its position, said spokeswoman Sarah Hudson. Axa SA “will review the situation, in light notably of the exclusivity agreement between AMP and AXA,” it said in a statement, referring to a pact with AMP in place till February 6. Axa SA and its advisors have had no contact or discussions with National Australia Bank, it said.

Axa Asia Pacific is responsible for Axa Group’s life insurance and wealth management businesses in the region, with operations in Hong Kong, China, Singapore, Indonesia, the Philippines, Thailand, India, Malaysia, Australia and New Zealand, according to the company’s website.