(Reuters) -French life and health insurer AXA has agreed to buy a 51% stake in Italian direct insurance group Prima for 500 million euros ($571 million) as it seeks to strengthen its position in Italy’s motor business, it said on Friday.
The company, headquartered in Milan, generated 1.25 billion euros of premiums in Italy last year, and achieved around 10% of overall market share in the retail motor segment, Axa said.
It also operates in Spain and United Kingdom.
“The acquisition… will not only significantly enhance our position in the Italian P&C market but also bring capabilities to strengthen our direct business in European Markets”, Axa European Markets & Health CEO Patrick Cohen said in a statement.
The French insurer and other minority shareholders have been a granted call and put option, dependant on Prima’s earnings, for the remaining 49% of the shares to be exercised in 2029 or 2030.
Axa said that although it will own 51% of the company it expects to recapture 100% of the premiums generated in Italy and Spain by third party insurers.
The French insurance group also said on Friday that its half-year net income edged down year-on-year to 3.92 billion euro, mainly due to “unfavourable” foreign exchange impacts.
($1 = 0.8756 euros)
(Reporting by Mateusz Rabiega in Gdansk, editing by Milla Nissi-Prussak and Matt Scuffham)
