AXA S.A. (“AXA”) announces today that it has successfully completed a secondary public offering of 40,000,000 shares (the “Offering”), at a public offering price of USD 20.50 per share, of its U.S. subsidiary, AXA Equitable Holdings, Inc. (“EQH”) and the sale to EQH of 30,000,000 shares (the “Share Buyback”)* at the per share price paid by the underwriters in the Offering. In addition, the underwriters exercised in full the over-allotment option to purchase an additional 6,000,000 EQH shares.
Net proceeds* amounted to USD 1.5 billion or Euro 1.3 billion*, corresponding to the sale of 76,000,000 EQH shares in the Offering, the full exercise of the over-allotment option granted to the underwriters, and the Share Buyback. Following this sale, AXA’s ownership in EQH has decreased from 60.1%* to 48.3%*.
The successful placement of another tranche of EQH shares leading to the deconsolidation of EQH from AXA’s financial statements represents a major milestone in AXA’s transformation journey, and provides additional financial flexibility for the Group, notably in the context of our stated priority to reduce leverage.
Since the IPO, AXA Equitable Holdings has been delivering strong operating results, and we wish them continued success as a leading US-listed financial services company.
Following the successful completion of the Offering and the Share Buyback, the retained non-controlling minority stake in EQH is deconsolidated and will subsequently be accounted for using the equity method.
The transaction is expected to result in a negative net income impact of approximately Euro 0.7 billion* in AXA Group’s HY 2019 consolidated financial statements. This impact reflects the difference between the Offering price and the consolidated book value* of (i) the EQH shares sold in the transaction, and (ii) AXA’s remaining 48.3%* stake in EQH (i.e. the loss required to be taken upon deconsolidation). This does not reflect Management’s expectations on the future evolution of EQH’s share price or of the price at which potential future transactions might take place.
The transaction is also expected to result in a reduction in AXA’s Debt Gearing* by approximately 1 point*.