Intact buys AXA Canada | Canadian Insurance

Intact buys AXA Canada

The $2.6 billion cash deal closes later this year.

Intact Financial has purchased AXA Canada in a $2.6 billion cash deal that will close later this year upon regulatory approval.

A further performance-based contingent consideration of up to $100 million may also be payable if certain profitability metrics are met within a period of five years, stated a media release.

“By combining the resources of these two highly regarded insurance franchises, the acquisition creates new opportunities for [Intact] as it will strengthen our offerings, notably in business insurance, improve our capabilities to support insurance brokers, reinforce our competencies in risk selection, expand our distribution platform and deepen the quality of our management team,” said Charles Brindamour, president and CEO of Intact Financial.

This acquisition is expected to generate an internal rate of return of 20% and provide annual accretion to operating earnings per share of 15% in the mid-term. Additionally, it will increase Intact’s direct premiums written by $2.0 billion to more than $6.5 billion.