AXA announced that AXA Germany has entered into an agreement with Athora Deutschland GmbH, a licensed insurer in Germany, to sell a portfolio of EUR 16 billion of life and pensions insurance reserves in Germany.

The French insurance group mentioned that the portfolio subject to the agreement has been closed to new business since 2013 and is mainly composed of traditional Savings policies, with an average guaranteed rate of 3.2%. "The reduction of guarantees on AXA's balance sheet resulting from the sale will further diminish the Group's exposure to financial market risk".

Under the terms of the agreement, AXA Germany will sell the portfolio to Athora Germany for a consideration of EUR 660 million, representing an implied multiple of 18x 2022E earnings. The sale is expected to result in estimated net cash proceeds of EUR 0.4 billion to AXA S.A.

"AXA intends to offset the earnings dilution from the disposal with a share buyback to be launched following the closing of the transaction. As part of the transaction, AXA IM will enter into an agreement to provide asset management services to Athora until 2028".