Protective Life to buy AXA U.S. life portfolio for $1 billion

Thu Apr 11, 2013 4:53am EDT

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(Reuters) - Protective Life Corp (PL.N) agreed to buy a portfolio of old policies from French insurer AXA SA's (AXAF.PA) U.S. business for $1.1 billion, with the aim of squeezing more value out of them.

Birmingham, Alabama-based Protective Life said the deal with Axa's Mony Life Insurance Company should produce a steady income stream and increase earnings per share. Most of the policies are life insurance written before 2004.

AXA, which bought Mony in 2004 for $1.5 billion, will take a capital loss of below 100 million euros ($131 million), in part attributable to the difference between what it paid for the business initially and what it is being sold for now.

Last month, people familiar with the situation said Protective Life was the leading candidate to buy U.S. life insurance assets from Axa, which has been expanding into emerging markets while scaling back its presence in North America after years of underperformance in that region.

AXA said on Thursday it would continue to use Mony Life to write new business in the United States.

"This transaction allows us to further grow our US business where we have been achieving good momentum while freeing up capital invested in closed portfolios to improve our financial flexibility and enable additional investment in high-growth markets and businesses," AXA Chief Executive Henri de Castries said in a statement.

AXA shares were up 1.2 percent at 3.38 a.m ET, outperforming the European insurance sector .SXIP, which was up 0.4 percent.

The transaction values the portfolio at 0.7 times its book value, a premium to AXA's own book value, a Paris-based analyst said. AXA trades at 0.6 times book, according to Thomson Reuters data.

"All in all I would expect a small positive reaction because the market has concerns about (AXA's) leverage," the analyst said, noting that the French insurer borrows at higher yields than larger German rival Allianz (ALVG.DE).

Including a capital surplus of $303 million, the total investment by Protective Life is about $1.09 billion, the company said.

It expects the deal to add between $0.10 and $0.15 to its earnings per share in 2013 and between $0.55 and $0.65 per share in 2014.

Protective Life shares closed up 2 percent at $35.59 on the New York Stock Exchange on Wednesday, prior to the announcement.

Willkie Farr & Gallagher LLP and Barclays PLC were financial advisers to Protective Life.

($1 = 0.7642 euros)

(Reporting by Tej Sapru in Bangalore and Christian Plumb in Paris; Editing by Erica Billingham)

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Comments (2)
rabshire wrote:
Will PL Chairman Johns tell shareholders that PricewaterhouseCoopers is standing on both sides of the MONY deal and that MONY’s financial statements have been fraudulent for many years! See for details on the MONY Ponzi that Johns is exposing PL to. Don’t ask is the info is true or false….. ask why PWC and Dennis Nally would all it in the first place.
“This site has been vetted without objection by the Securities & Exchange Commission, the USDOJ, the Texas Department of Insurance and U.S. Senator Bill Nelson. SEC Chairman Mary Schapiro via FOIA has admitted that the SEC does not have an accurate, concise and properly opined financial statement for MONY for anytime in the last 10 years.”

Apr 10, 2013 10:33pm EDT  --  Report as abuse
rabshire wrote:
According to the sworn affidavit of “Bush Team” endorsed CPA, R. Larry Johnson, MONY first started cooking their books in 1982. Coopers & Lybrand / PricewaterhouseCoopers has issued unqualified opinions falsely claiming to be independent on financial statements with hundreds of millions of dollars in illegal transactions. MONY’s Chairman, Michael I. Roth, is a former Coopers & Lybrand partner. Mr. Johnson, whose affidavit is available on this site, was unaware of the Florida Department of Insurance letter to Mr. Roth at the time of his affidavit and did not know of the outside financial dealings between MONY and Coopers & Lybrand that violated the auditor independence rules. During 1998 PricewaterhouseCoopers used the fraudulent financials to take MONY public with the blessing of the SEC’s Northeastern Regional Director, Carmen J. Lawrence. Ms. Lawrence was then rewarded with the position of Co-Partner to Harvey Pitt at Fried, Frank, Harris, Shriver & Jacobson. Mr. Pitt was then appointed Chairman of the Securities and Exchange Commission by President Bush. Mr. Pitt and his minions at the SEC now refuse to answer FOIA requests to protect PWC and President Bush’s illegal dealings with MONY. Additional information about corruption at the Securities & Exchange Commission and Grand Jury Letter to Governor G. W. Bush is available @

Apr 10, 2013 10:49pm EDT  --  Report as abuse
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