AXA said it has agreed to sell its Belgian banking operations, AXA Bank Belgium, to Crelan Bank for cash and Crelan’s loan insurance business. The deal, in all, is worth nearly $690 million.

In addition, AXA and Crelan have also agreed to a long-term P/C and protection insurance distribution partnership, which extends the existing relationship between AXA Bank Belgium and AXA. And, finally, AXA is buying a minority equity stake in Crelan and AXA Bank Belgium.

Details of the deal include:

• AXA will sell 100 percent of AXA Bank Belgium to Crelan for $689.5 million. This includes $600.5 million in cash, and the transfer to AXA Belgium of 100 percent of Crelan Insurance, which is worth $89 million. Crelan Insurance, which is Crelan’s insurance company, provides protection insurance linked to loans originated by Crelan.
• AXA will take a 9.9 percent minority equity stake in Crelan NV and AXA Bank Belgium, investing a total of $100.1 million, which will be fully financed by Crelan’s purchase of the contingent convertible bonds previously issued by AXA Bank Belgium to AXA Group.

“This transaction is another important step in the execution of our Ambition 2020 strategy, as we concentrate on businesses with critical scale and continue to simplify our business profile,” said Thomas Buberl, chief executive officer of AXA, in a statement.

“We are extremely pleased to maintain our strong historical links through a continued partnership with AXA Bank Belgium, a key factor in this transaction, and to extend this partnership to Crelan’s network,” he added. “Combining this with the transfer of Crelan’s insurance business to AXA, our leadership position in our preferred segments in Belgium will be further reinforced.”

Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approvals, and is expected to be finalized in the second quarter of 2020.

Crelan is a cooperative bank that is directly owned by its clients via CrelanCo. In 2018, Crelan, including its subsidiary Europabank, was the seventh largest bank in Belgium by assets. The bank offers both retail and SME commercial banking services to approximately 920,000 customers via 633 branches, where the bank’s agents also sell both P/C and life & saving products. Crelan Insurance is the insurance company of Crelan, providing protection insurance to Crelan’s customers on mortgages, professional and consumer loans.

Source: AXA

*A version of this story ran previously in our sister publication Insurance Journal.