Buyout vehicle Resolution has bought Axa Life for £2.75bn in a deal part-funded by a rights issue of approximately £2.05bn.
The deal comprises £2.25bn in cash and up to £500m in deferred consideration notes to be issued by Axa, with investors agreeing to sub-underwrite 52% of the cash call.
It will be financed by a rights issue of approximately £2.05bn, with the remaining amount coming from a fund acquisition finance facility.
The AXA UK life business will be acquired and held by Friends Provident Holdings.
Upon integration of the two businesses, Friends Provident will be renamed Friends Life. This is expected to happen in early 2011.
Resolution said the transaction marked a "logical next step" in its consolidation strategy in the UK life and asset management sectors - and would provide a platform with a "wide range of options for future consolidation".
Friends Provident chief executive Trevor Matthews said: "We are excited by the continued prospects for our business as the driving force in Resolution's consolidation strategy for open businesses in the life sector. We look forward to combining our capabilities with those of AXA's UK life business and creating a model entity for the future."
The deal sees Resolution acquire Axa's traditional life and pensions book, IFA protection and group pension business.
Axa Wealth, which comprises comprises of its wrap proposition Elevate, Architas Multi-Manager, Axa Wealth International, and the AXA Winterthur specialist investment and pensions businesses, is unaffected by the deal. The same is true of Axa Insurance, Axa PPP healthcare and Bluefin.
Axa UK says the decision to accept Resolution's approach follows its intention to increase its focus on "RDR-ready" Axa Wealth, in an "acceleration of its new model strategy".
It says the move follows a review of life operations which concluded Axa UK should centre on its wealth management business which employs over 3,000 people. It adds the potential transaction "does not call into question" its long-term commitment to the UK market.
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