Filed by AXA
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 and 14d-2
under the Securities Exchange Act of 1934
Subject Company: AXA Financial, Inc.
Commission File No.: 1-11166
August 30, 2000
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Strategic repositioning in the US
August 30, 2000
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SUMMARY
o Strategic vision
o DLJ transaction
o Proposed minority
buy-out of AXA Financial
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AXA strategic vision
o Ambition to be the worldwide leader in financial protection and wealth
accumulation services
o Business scope
Financial protection:
o Insurance and asset management
o Expanding to broader personal financial services
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AXA strategic vision
o Target Customers
o Individual customers over their lifetime
o Wholesale customers where AXA can leverage strong market
positions and generate synergies with other lines of business
o Geographic Scope
o Priority is major developed markets: North America, Western
Europe, Japan
o AXA also operates in other markets where sizeable and profitable
activities can be built in a stable environment
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DLJ TRANSACTION
o Rationale
o Characteristics of transaction
o Financial impact
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Rationale for DLJ transaction (1/2)
From DLJ's perspective
o DLJ has had a brilliant track record in the 1990s
o BUT
- European expansion needs to be accelerated and complemented by
Asian expansion as the investment banking industry becomes more
global
- International deals are becoming larger; with one stop shopping
as a common feature, they require strong balance sheet and
ability to underwrite large amounts of debt as well as equity
- Cost of talent is increasing
o THEREFORE
- Increasing need to partner with another large investment bank
o The transaction will create a leading global investment bank
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Rationale for DLJ transaction (2/2) From AXA's perspective
o AXA is not willing to increase its exposure to investment banking
o DLJ implies risk & creates volatility for AXA earnings and AXA stock
o Sale creates financial flexibility and allows strategic repositioning
o Credit Suisse Group's offer is financially attractive
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Transaction characteristics (1/2)
Credit Suisse Group (CS) offers to buy DLJ
o $ 90 per share (IPO in late October 1995 at $ 13.5)
o 47.4% premium over market price as of August 25 ($ 61.0)
o 92.5% premium over 90 day average market price ($46.7)
o Multiples: PER of 19.9; 3.4 times book value (fully diluted)
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Transaction characteristics (2/2)
o Total transaction amounts at $13.5 billion on a fully diluted basis
o Total transaction amounts at $11.5 billion on outstanding DLJ shares:
o 50% cash
o 50% CS stock
o AXA will receive $ 8.1 billion:
o $ 5.7 billion in CS shares
o $ 2.4 billion in cash
o CS has offered to repurchase from AXA Group at market price $1.2 bn of
shares at closing (in November 2000)
o AXA will manage liquidity of its investment in CS stock in close
coordination with CS
o Minority shareholders will receive only cash
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Financial impact of transaction
o At AXA Financial level
- Gross proceeds: $ 7.9 bn
- Assuming proceeds are being reinvested at 11% pre-tax rate, EPS
remains stable
o At AXA Group level
- Gross proceeds: $ 8.1 bn
- Proceeds net of tax: $ 5.9 bn
- Profit on disposal: $ 2.75 bn net of tax
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Proposed
minority buy-out
of AXA Financial
o Characteristics of offer
o Financial impact
o Rationale
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Characteristics of offer
o AXA offers to buy out the minority interests (39.7%) in AXA Financial
(AXF)
o Under this proposal, AXF shareholders would receive, for each AXF
share, consideration consisting of:
o $ 32.1 in cash
o 0.271 AXA ADR
o On the basis of August 29th, 2000 closing price of AXA ADR, the offer
amounts at $53.5 per share:
o 21.8% premium over 30 day average market price ($43.9)
o 35.5% premium over 90 day average market price ($39.5)
o Offer conditional upon closing of DLJ transaction
o Offer will be negotiated with special committee of independent
directors of AXA Financial
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Financial impact of transaction
o Total amount: $ 10.4 bn
o Net amount of goodwill created: $ 4.1 billion (after partial charge of
goodwill to equity)
o Transaction would be neutral to slightly accretive on AXA cash EPS
(pre goodwill amortization)
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Rationale for proposed minority buy-out of AXA Financial
o Increase proportion of AXA earnings coming from US life insurance
and asset management
o Take full benefit of future profits emerging from AXA Financial
o Develop synergies and move towards more operational integration of
AXA's businesses worldwide
o Facilitate M&A activity by AXA in the US, AXA stock being a more
effective acquisition currency
o Take advantage of the opportunity offered by the sale of DLJ
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Important legal information
This presentation contains forward-looking statements. While these
forward-looking statements represent our judgments and future expectations,
a number of risks, uncertainties and other important factors could cause
actual developments and results to differ materially from our expectations.
These factors include, but are not limited to, the risk that AXA and AXA
Financial will not enter into the proposed transaction or any other
transaction; the costs related to this proposed transaction; the risk that
anticipated synergies will not be obtained or not obtained within the time
anticipated; and other key factors that we have indicated that could
adversely affect our businesses and financial performance contained in our
past and future filings and reports, including those with the U.S.
Securities and Exchange Commission (the "SEC"). Neither AXA Financial nor
AXA is under any obligation to (and expressly disclaims any such
obligations to) update or alter its forward-looking statements whether as a
result of new information, future events or otherwise.
The structure of the proposed transaction between AXA and AXA Financial has
not yet been agreed. If the agreed structure of the transaction requires
the solicitation of proxies, AXA and AXA Financial will file a proxy
statement/prospectus and other relevant documents concerning the business
combination with the SEC. If the agreed structure of the proposed
transaction involves a tender offer, then the complete details of AXA's
registered exchange offer will be set forth in an exchange offer
registration statement and other appropriate filings to be made with the
SEC. We urge investors to read the proxy statement/prospectus, the exchange
offer registration statement and any other relevant documents that may be
filed with the SEC because they will contain important information.
If proxies are solicited from the AXA Financial stockholders, AXA Financial
and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from the security holders of AXA Financial
in favor of the merger. The directors and executive officers of AXA
Financial include the following: Claude Bebear, Henri De Castries, Edward
D. Miller, Michael Hegarty, John S. Chalsty, Francoise Colloc'h,
Claus-Michel Dill, Joseph L. Dionne, Jean-Rene Fourtou, Donald J. Greene,
Anthony J. Hamilton, John T. Hartley, John H. F. Haskell, Jr., Nina
Henderson, W. Edwin Jarmain, Didier Pineau-Valencienne, George J. Sella,
Jr., Peter J. Tobin, Dave H. Williams, Stanley B. Tulin, Jose S. Suquet and
Robert E. Garber. Collectively, as of March 1, 2000, the directors and
executive officers of AXA Financial may be deemed to beneficially own less
than 1% of the outstanding shares of AXA Financial common stock. Security
holders of AXA Financial may obtain additional information regarding the
interests of such participants by reading the proxy statement/prospectus
when and if it becomes available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction.
Investors will be able to obtain any documents filed with the SEC relating
to a proxy solicitation free of charge at the SEC's website, www.sec.gov.,
and any documents (excluding exhibits) filed with the SEC relating to an
exchange offer from the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549, Telephone: (202) 942-8090, Fax: (202)
628-9001, Email: [email protected]. In addition, documents filed with the
SEC by AXA will be available free of charge from the General Counsel, AXA,
21 Avenue Matignon, 75008 Paris, Telephone No.: 011-33-1-40-75-72-00.
Documents filed with the SEC by AXA Financial will be available free of
charge from Financial Communications, AXA Financial, Inc., 1290 Avenue of
the Americas, New York, NY 10036, Telephone No.: (212) 554-1234.
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