November 29, 2010

When AXA Mediterranean Holding, a French unit of Spain's AXA SA, bought a Mexican insurance conglomerate, Seguros ING SA de CV (which it renamed AXA Seguros), from Dutch ING Groep's ING Insurance International for $1.5 billion in 2008 it didn't expect anything to go wrong. Nevertheless, the stock purchase agreement covering the deal prudently included clauses to protect the buyer . . . just in case. As things turned out, the just in case became a legal case when AXA sold one of Seguros' constituent businesses, the bond company AXA Fianzas (formerly ING Fianzas) to Afianzadora Sofimex. As the sale went forward, due diligence conducted by Sofimex exposed substantial misrepresentations by ING regarding Fianzas. In 2007, ING stated that Fianzas had been valued at $118 and $16

Coverage of the case can be found here: