European insurance behemoth prepares bridgehead for mainland China strategy. Late last month AXA's Asia Pacific Holdings subsidiary agreed to buy Winterthur's Hong Kong-based life-insurance business for around $246 million with the aim of strengthening its presence in China's fast-growing wealth management market.

Winterthur Hong Kong has around $396 million in assets.

The $246-million price tag is subject to "an adjustment based on future performance of the business measured" in 2009.

Aftermath

"Winterthur Hong Kong is a strategically attractive growth opportunity in a market we know well," says Andrew Penn, chief of Melbourne, Australia-based AXA Asia Pacific.

Asia is throwing up new millionaires at a faster rate than more developed economies in America and Europe, according to Capgemini's latest annual World Wealth Report. More startlingly, Goldman Sachs said last year that the so-called BRIC economies of Brazil, Russia, India and China will, within about 30 years, collectively surpass the combined economic output of the U.S., Japan, Germany, the U.K., France, Italy and Canada.

AXA Asia Pacific's move on Winterthur Hong Kong comes about six months after its French parent set out to buy Swiss insurer Winterthur from Switzerland's Credit Suisse for around $10.1 billion. Paris-based AXA owns 51% of AXA Asia Pacific.

AXA seems focused on China rather than on more mature Asian markets. In recent months the company rejected the purchase propositions for Winterthur's Japanese and Indonesian assets.

Hong Kong accounts for about 90% of AXA Asia Pacific's gross premiums from its Asian operations, making it its biggest market outside of Australia and New Zealand. -FWR

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