AXA to focus M&A plans in 16 countries

AXA will narrow its acquisition focus to 16 key countries and could sell some assets in markets where it lacks scale, its executives have said.

“We want to focus on fewer countries. We want to focus on these countries where we have scale and potential,” chief executive Thomas Buberl told analysts at an investors’ day in Paris.

AXA singled out 10 developed markets – such as Germany, France, Belgium, Italy and the United States – and six in emerging markets – Brazil, China, Indonesia, Mexico, the Philippines and Thailand – countries that together account for nearly 90 percent of AXA’s profits.

“Our M&A (mergers and acquisitions) strategy will focus only on those 10 plus six countries,” Buberl said.

AXA earlier this year ruled out major takeovers. Buberl said to Reuters that the company did not want to overpay for acquisitions, and would be ready to use the money for share buybacks, if it did not find the right takeover target. The insurer also said it would dedicate EUR200 million (USD234 million) of its annual EUR1 billion mergers and acquisitions budget to innovation. The company said it could sell some assets in 26 markets where it lacks scale.

Chief financial officer Gerald Harlin said that did not mean that activities in these countries – which include Algeria, Colombia, Turkey and Russia – would all be sold.

Recently, AXA presented a plan to simplify its operating model with a new structure based on geographical areas, rather than business units.

The reshuffle saw the departures of two executives who had worked at the group for more than 15 years – Gaëlle Olivier, head of AXA’s global property and casualty business and Paul Evans, head of life, savings and health.