SAI CERTINVEST AND SIF TRANSILVANIA TAKE CONTROL OF AXA LIFE INSURANCE Frăţilă files a complaint with the ASF against the acquisition of a stake in Axa Asigurari by SIF Transilvania

On December 18th, 2014, SAI Certinvest and SIF3 Transilvania announced that they have signed an agreement by which they acquired from the Axa Group its life insurance and savings operations in Romania.

In line with the terms of the agreement, SAI Certinvest will acquire a stake of 70% in the Romanian branch of AXA, AXA Life Insurance SA, while SIF Transilvania will acquire 30%, according to a press release.

The companies said that the terms and conditions of the transaction will not be made public.

Considering that SIF Transilvania is listed on the stock exchange, the acquisition of 30% of AXA Life Insurance does not require it to file a mandatory report with the BSE.

According to regulations in effect, issuers need to report any concluded contracts which exceed 10% of the net turnover of the last annual financial statement, or the contracts concluded outside the company's day-to-day line of business.

According to the bylaws of SIF Transilvania, the Directorate must request the approval of the Supervisory Board for transactions that exceed 5 million Euros.

Last year, AXA Life Insurance România posted losses of 45.99 million lei for the fourth year in a row, up 4.9% over 2012.

Constantin Frăţilă, one of the largest shareholders of SIF Transilvania, who holds a 5% stake in the company, said: "I have filed a complaint with the Financial Oversight Authority concerning the transaction that SIF Transilvania is going to make alongside Certinvest, because I consider it inopportune and illegal".

Constantin Frăţilă won in court, the annulment of the decision of the shareholders of SIF Transilvania made in August, by which he had been dismissed from the SIF3 Board of Directors, but the company announced it would appeal the ruling.

On the other hand, the representatives of the new shareholders of AXA Life Insurance are hoping the investment will be fruitful.

Eugen Voicu, Founding Shareholder of SAI Certinvest, said: "Life and Health insurance creates a powerful synergy with the current activity of Certinvest, in terms of the product portfolio, as well as of the clients' interests. The new shareholders will increase the company's volume of activity and will launch new products, aimed predominantly at entrepreneurs".

Radu Toia, executive vice-president of SIF Transilvania, said: "Through this purchase, SIF Transilvania is diversifying its holdings with a company in a line of business that is not present in the company's portfolio, and affirms its strategic interest in non-banking financial services, a segment where we estimate that the potential for growth is substantial in the medium and long term".

The transaction is subject to the usual requirements for being completed, including obtaining the necessary approvals from the regulators, according to the quoted press release.

AXA recently announced that it has terminated the contract for the sale of its insurance operations - AXA Life Insurance România to Astra Asigurări, and the French group is going to evaluate the strategic options concerning its Romanian operations, the Romanian AXA subsidiary announced.

The failure of the deal came as, three months after the agreement was announced, the Financial Oversight Authority (ASF) instituted the special receivership at Astra Asigurări in order to ensure its financial turnaround, dismissed the company's managers, suspended the shareholders' voting rights and appointed KPMG Advisory as receiver.

SAI Certinvest has more than 250 million lei in assets under management. The company manages a diversified portfolio of mutual funds (stock funds, index funds, fixed income funds, diversified funds), as well as an important number of individual portfolios, as it is a leader on that segment. SIF Transilvania manages assets of approximately 250 million Euros.

French group AXA entered the Romanian market in 2010, when it acquired Omniasig Asigurări de Viaţă from Austrian group Vienna Insurance Group (VIG).

Prior to that acquisition, Omniasig Asigurări de Viaţă had reported losses of 24.5 million lei between 2008-2009, according to data provided by the regulators.

In the first nine months of 2013, revenues of AXA Life Insurance from subscribed premiums reached 23.3 million lei, compared to 20.6 million lei one year ago.