Intact Financial completes AXA Canada acquisition, names new executives
Intact Financial Corporation’s (IFC) $2.6 billion acquisition of AXA Canada is complete. The deal, announced on May 31, 2011, is expected to increase Intact’s market share in Canada to approximately 16.5 per cent and its premiums to $6.5 billion.
“The completion of this transaction represents a defining milestone in the history of our organization,” said Charles Brindamour, Chief Executive Officer. “The benefits of combining the knowledge, competencies and talent of two best-in-class P&C insurers are compelling. We will strengthen our product offerings, improve our capabilities to support insurance brokers, expand our distribution platform, reinforce competencies in risk selection and deepen the quality of our management team.”
Intact also announced today the appointment of Louis Gagnon to the position of President and Chief Operating Officer of Intact Financial Corporation and Jean-François Blais to the position of President of Intact Insurance. Both will report directly to the Chief Executive Officer.
In his new role as President and Chief Operating Officer, Louis Gagnon will oversee the claims and information technology functions, two areas that are key touch points in our brokers’ and customers’ experience. He will also lead Intact’s efforts in expanding its proprietary distribution network in Canada and its growth initiatives abroad, and will be responsible for strategy, communications and audit. Mr. Gagnon joined Intact in 2007 after a successful career in financial services and insurance distribution. Mr. Gagnon was previously President of Intact Insurance.
As President of Intact Insurance, Jean-François Blais will assume the leadership of IFC’s largest insurance operation with more than $5.5 billion in premiums and an expanded brokerage network. In his new role, Mr. Blais will be responsible for accelerating the growth of Intact Insurance and for building closer relationships with brokerages across the country. Prior to his new appointment at Intact, Mr. Blais had assumed the leadership of AXA Canada as its President and Chief Executive Officer and as a Board member for the last seven years. During that period, Mr. Blais was the architect and the driving force behind the success of AXA in Canada.
Since the announcement of the planned acquisition in May, IFC has secured long-term financing at attractive rates, despite a volatile capital market environment. The $2.6 billion acquisition has been financed with the proceeds from the issuance of subscription receipts, preferred shares and medium term notes in an aggregate amount of approximately $1.8 billion. The balance was funded from IFC’s excess capital and $400 million drawn down under the terms of a credit facility arranged in connection with the acquisition.
As a result of the closing of the acquisition, the escrow release conditions for the 20,125,000 subscription receipts issued in June 2011 have been met and the subscription receipts will be automatically exchanged in accordance with their terms on a one-for-one basis for common shares of IFC through the facilities of CDS Clearing and Depositary Services Inc. In addition, a dividend equivalent payment of $0.74 per subscription receipt will also be payable to holders of subscription receipts as a result of IFC having declared a dividend of $0.37 per common share payable to common shareholders of record on June 15, 2011 and a dividend of $0.37 per common share payable to common shareholders of record on September 15, 2011. Trading in the subscription receipts will be halted effective immediately and the subscription receipts will be delisted as at the close of business on September 26, 2011.
The subscription receipt conversion will increase the number of outstanding common shares to 129.6 million, resulting in the average outstanding number of common shares being 111.2 million for the third quarter 2011 and 110.5 million for the first nine months of 2011.
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