AXA to buy-out Oyak’s 50% stake in AXA Oyak, Turkey’s 2nd largest insurer

AXA announced it has entered into an agreement to acquire OYAK’s 50% share in AXA OYAK Holding A.Åž., a joint venture company established in 1999. Under the terms of the agreement, AXA will pay a purchase price of $525 mln (Euro 355 mln) in cash for OYAK’s share in AXA OYAK.

AXA OYAK enjoys a leading position with 10% total market share on the fast-growing Turkish insurance market. Mainly focused on non-life, especially motor and property, the company has experienced strong top-line growth in the past years and is one of the most profitable players in the market. In the first half of 2007, AXA OYAK posted revenues of Euro 342 mln (+20%) and underlying earnings of Euro 19 mln (+26%).
This agreement is an opportunity for the AXA Group to significantly strengthen its presence in Turkey and is in line with its strategy of reinforcing its exposure to emerging insurance markets.

The transaction, which is subject to local regulatory approval, is expected to close by early spring of 2008. Following closing, the parties have agreed that AXA OYAK and
its subsidiaries will no longer use the OYAK name or trademark.

In addition, according to the same agreement, AXA OYAK Holding will be buying, for $15 mln (Euro 10 mln), the 1.5% share that Mais Motors, an OYAK joint venture company, holds in AXA OYAK’s non-life subsidiary.
With a population of 70 mln and low penetration rates in both non-life (1.4%) and life (0.2%), Turkey is a fast-growing insurance market with very strong potential.
Distribution is dominated by agents networks (65% of total premiums ) while non proprietary distribution channels (banks and brokers) begin to emerge.

In 2007, AXA OYAK counted 568 employees and sold 3.4 million contracts. AXA OYAK Sigorta, 71%-owned by AXA OYAK, is the second largest company in the Turkish non-life insurance sector with an 11.8% market share and revenues of Euro 507 mln in 2006. Between 2002 and 2006, the company achieved 35% growth per annum.
AXA OYAK Hayat Sigorta, 100%-owned by AXA OYAK, is the eighth largest company in the Turkish life market, with a 5.5% market share and revenues of Euro 70 mln in 2006. Between 2002 and 2006, the company achieved 16% growth per annum.