AXA Asia Pacific's minority shareholders have strongly backed a $14.6 billion merger with rival AMP, but displayed less enthusiasm for a generous payout for the wealth manager's top executives.
The strong support for the merger, which was largely anticipated, draws the curtain on the company, which started out 142 years ago selling life insurance under the name of the National Mutual Life Association of Australasia.
Minority AXA Asia Pacific shareholders accounted for 45 per cent of the company's stock. Some 99.2 per cent of the votes cast at yesterday's meeting in Melbourne backed AMP's $14.6 billion takeover.
A second proposal to sell AXA Asia Pacific's Asian businesses to its French parent, AXA SA, secured 98.9 per cent of votes cast.
Both needed at least 75 per cent support for the AMP takeover to go ahead.
However, shareholder support faded when it came to a $75 million termination package for AXA's Asia Pacific's executives, including $17 million for chief executive Andrew Penn. Only 87.4 per cent of shareholder votes backed the payout after several institutional investors resisted the proposal.
New laws make it mandatory for a vote if a termination payment is greater than one year's base pay.
After the meeting, AXA Asia Pacific chairman Rick Allert labelled the vote a historic moment for the wealth manager.
"AXA Asia Pacific has had a successful record as a public company and has been at the forefront of the evolution of the financial services industry in Australia, New Zealand and Asia, and we are handing the business over in good shape," Mr Allert said. Following the merger Mr Allert will join AMP's board.
AMP first approached AXA Asia Pacific more than a year ago. This drew out a rival offer from National Australia Bank, which eventually stumbled on regulatory hurdles.
AMP chief executive Craig Dunn said the merging of AMP and AXA would deliver "a new force in financial services by creating a company with the size and the resources to be a strong competitor to the big four banks in wealth management".
The vote means AXA Asia Pacific will soon be removed from the benchmark S&P/ASX 200 Index. AMP will be upgraded to represent 1.3 per cent of the index.
Court approval is still required on the AMP takeover, with a hearing scheduled for Monday.
Frequently Asked Questions about this Article…
What was the outcome of the AXA Asia Pacific vote on the AMP takeover?
Minority shareholders of AXA Asia Pacific overwhelmingly backed AMP's takeover, with 99.2% of votes cast in favour of the $14.6 billion deal at the Melbourne meeting, clearing a key shareholder hurdle for the merger.
How large is the AMP takeover of AXA Asia Pacific and who initiated the approach?
AMP's takeover of AXA Asia Pacific is valued at $14.6 billion. AMP first approached AXA Asia Pacific more than a year before the vote, which eventually drew a rival offer from National Australia Bank that faltered on regulatory hurdles.
Did shareholders approve the sale of AXA Asia Pacific’s Asian businesses to AXA SA?
Yes. A separate proposal to sell AXA Asia Pacific’s Asian businesses to its French parent, AXA SA, secured strong shareholder approval with 98.9% of votes cast in favour.
What happened with the proposed $75 million termination package for AXA Asia Pacific executives?
Shareholder support for the $75 million termination package was weaker: 87.4% of votes backed the payout after some institutional investors resisted it. The package included a $17 million payment for chief executive Andrew Penn.
Are any approvals still required before the AMP takeover is finalised?
Yes. Court approval is still required for the AMP takeover, and a court hearing was scheduled for the Monday following the shareholder meeting.
How will the AMP–AXA vote affect the S&P/ASX 200 Index membership?
The vote means AXA Asia Pacific will be removed from the S&P/ASX 200 Index and AMP will be upgraded to represent about 1.3% of the index once the changes are implemented.
What did AXA Asia Pacific’s chairman say about the vote and his role after the merger?
Chairman Rick Allert described the vote as a historic moment, saying AXA Asia Pacific is being handed over in good shape. He also said he will join AMP’s board following the merger.
What strategic benefit did AMP’s chief executive say the merger would deliver for investors?
AMP chief executive Craig Dunn said the merger with AXA would create 'a new force in financial services' by building a company with the size and resources to be a strong competitor to the big four banks in wealth management, a point aimed at benefiting customers and investors.
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