Buyout Deal for AXA's European Unit Collapses -- WSJ
By William Louch
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 7, 2020).
U.K. private-equity firm Cinven's planned purchase of a unit of
French insurance company AXA SA has collapsed, the latest example
of how the coronavirus pandemic has stymied deal making.
AXA said Thursday that an agreement it struck to sell its AXA
Life Europe business to Cinven had been terminated after failing to
meet certain conditions.
A source close to the deal said that the two parties were unable
to bridge the gap between their expectations on the unit's
valuation, particularly after the Covid-19 pandemic hit.
The announcement ends negotiations that date back to Aug. 1,
2018, when AXA disclosed it had received an offer from Cinven for
the unit. The private-equity firm initially agreed to pay EUR925
million ($1.01 billion)) for shares in AXA Life Europe with a
subsequent distribution of EUR240 million by the unit to AXA before
the deal closed.
AXA Life Europe is a specialized platform that designs,
manufactures and distributes AXA's variable annuity products across
The transaction's demise is the latest example of how the
pandemic has hampered private-equity deal making across the globe.
Private-equity firms world-wide announced $180 billion in
acquisitions in the first half, 36% less than the first half of
2019, according to a report released late last month by Ernst &
Young Global Ltd.
Activity has been depressed by several factors, including a lack
of debt financing and a mismatch in pricing expectations between
buyers and sellers.
A handful of deals that had already been agreed to have been
canceled or renegotiated at lower prices. In May, U.S.
private-equity firm Sycamore Partners and Victoria's Secret owner L
Brands Inc. agreed to scrap a deal for the lingerie retailer.
Last month, meanwhile, cybersecurity company Forescout
Technologies Inc. agreed to a revised deal with private-equity firm
Advent International Corp. at a price that was around 12% lower
than the $33 a share Advent originally said it would pay in
AXA said in a statement Thursday that it is continuing to review
strategic options with regard to the AXA Life Europe unit it had
agreed to sell to Cinven.
The Paris-based company, one of Europe's largest insurance
groups, saw earnings fall by 48% to EUR1.9 billion through the
first six months, with the fall driven largely by claims related to
Cinven is one of Europe's best-known private-equity groups and
is currently investing from a EUR10 billion fund that it closed
last year. Last week, the firm announced it had completed its
EUR17.2 billion acquisition of Thyssenkrupp AG's elevator division,
which it bought as part of a consortium that included Advent.
Write to William Louch at firstname.lastname@example.org
(END) Dow Jones Newswires
August 07, 2020 02:47 ET (06:47 GMT)
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