So much for Credit Suisse's
It was announced Wednesday that AXA will be buying Winterthur for a bit under $10 billion in cash. In an odd twist, this will probably be a deal that works out well for all parties. The multiples that AXA is paying don't look bad (especially when you factor in eventual synergies) and Credit Suisse is getting a better price than the recent estimates I'd seen for the IPO. Factor in the fact that the erosion in global equity markets makes the IPO market look a little less certain (Vonage
If I had to gripe about something (and I do -- it's in my contract), I'd say that this wasn't exactly the direction I expected AXA to go in right away. This deal will definitely expand AXA's European insurance business and add assets under management. And it's also true that Credit Suisse has done a good job of prettying-up Winterthur for a sale.
But I had thought that AXA might be looking in the direction of an American company that would improve its variable annuity business -- Prudential
For Credit Suisse, this looks like just another part of the plan to focus on banking and wealth management. Credit Suisse ranks up there with the likes of Merrill Lynch
All in all, this could turn out to be a win-win for two companies that I already liked to start with.
For more Foolish financial food for thought:
Fool contributor Stephen Simpson but has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
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