AXA Taps Colombian Growth

French insurance group AXA was seen paying a reasonable price to acquire control of Colpatria’s Colpatria Seguros insurance business, in a EUR259m ($346m) transaction that is the latest M&A deal in a busy and often expensive Colombian FIG sector. The move represents about 13x earnings, analysts say, which puts it in line with deals AXA and other global powers have done in the emerging markets. “It’s a reasonable and rather attractive transaction given the growth prospects in this market,” Daniel Bischof, analyst at Helvea tells LatinFinance. He says the 13x figure compares to a 10x figure in Zurich Financial’s $1.67bn purchase in 2011 of Santander’s LatAm insurance operations, and a 15x-16x level seen in the $879m purchase by Allianz of Turkey’s Yapi Kredi Sigorta earlier this year. “Paying 13x for a number four position in a fast-growing market where the target is making money is attractive,” Peter Eliot, analyst at Berenburg Bank tells LatinFinance. Colpatria Seguros is Colombia’s fourth-largest insurance company, with a market share of 7%, AXA says. The move is in line with a previously communicated emphasis on EM growth markets. The transaction, reached through a controlled auction process, is subject to the usual regulatory approvals and is expected to close in 2014. UBS advised Colpatria, according to a person with knowledge of the transaction, with Simpson Thacher & Bartlett and Gomez-Pinzon Zuleta as legal advisors. JPMorgan advised AXA, with Debevoise & Plimpton as legal advisor.