GACM España operates in the health and P&C insurance space. Credit: Photo by Hush Naidoo Jade Photography on Unsplash.

AXA Spain, a unit of French insurance major AXA, has entered exclusive talks to buy Spanish insurer Groupe Assurances du Crédit Mutuel España (GACM España).

The Spanish arm of AXA will be acquiring GACM España from Groupe des Assurances du Crédit Mutuel (GACM SA) for cash consideration of €310m.

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The transaction price represents a price-to-own funds multiple of one times of GACM España’s book value.

AXA said that the estimated price-to-earnings multiple is approximately nine times, after the implementation of expected capital and cost synergies.

GACM España primarily operates in the property and casualty and health insurance space in Spain and sells its products through a distribution network of agents and partners.

In 2021, the firm is said to have reported gross written premiums of €500m and a consolidated net income of €16m across its main business lines.

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GACM España’s consolidated Solvency II ratio was 237% on a Standard Formula basis at end of 2021, AXA added.

AXA deputy CEO Frédéric de Courtois said: “This transaction reflects our disciplined approach towards M&A in line with our strategy, enhancing our scale in one of our core European markets, with a focus on technical lines.”

AXA Spain CEO Olga Sánchez said: “This acquisition will strengthen our leading position in Spain and we look forward to growing our business while ensuring a smooth transition for both policyholders and employees.”

The proposed acquisition is subject to customary closing conditions and receipt of regulatory approvals. It is expected to close in the third quarter of 2023.

Earlier this year, media reports said AXA is in talks to buy the insurance business of Italian lender Banco BPM.