AXA Canada acquires The Citadel for $310 million

Winterthur Group is selling Winterthur Canada Financial Corporation and its wholly owned subsidiary, The Citadel General Assurance Company, to AXA Canada Inc. a wholly-owned subsidiary of AXA S.A. – for approximately Cdn$310 million.
The sale of its Toronto-based operations completes Winterthur’s withdrawal from the Canadian market, following the previous sale of its Quebec subsidiary, L’Unique.
Subject to regulatory approval, the transaction should be completed during the first quarter of 2006.
The sale of Winterthur Group’s Canadian subsidiary is in line with the company’s strategic efforts to sharpen its focus and reduce the complexity of its business. “We will continue to review our portfolio in order to concentrate our capital and resources on markets that achieve the best balance of growth and risk-adjusted returns,” Leonhard Fischer, CEO of Winterthur Group, said in a press release.
The Citadel’s financial results have significantly improved over the last few years as a result of a gradual shift towards a more commercial business focus, improved underwriting performance and a firmer pricing environment, according to Winterthur. “As the Canadian insurance market is currently undergoing a phase of consolidation, we have chosen to accept AXA’s attractive offer and to realize the value of The Citadel’s franchise,” Christen Schnor, head of Winterthur’s Market Group International, said in a release.
The Citadel provides commercial lines and accident and sickness insurance across Canada, as well as personal insurance throughout Canada excluding Quebec. The company offers products and services through independent brokers and is managed through three primary business segments – commercial lines, personal lines and accident and sickness.
The Citadel employs around 350 professionals and contributes around 2% of Winterthur’s gross premiums written. The Citadel posted net income of Cdn$10 million for the six-month period up to June 30, 2005, and reported total surplus capital of Cdn$190 million as of that date.