French insurance giant AXA has agreed to divest its Belgian banking business to Crelan Bank in a cash and stock deal worth €620m.

Under the terms of the agreement, Crelan will make a cash payment of €540m to AXA for its Belgian banking arm. The deal also involves the transfer of Crelan Insurance to AXA Belgium for €80m.

AXA CEO Thomas Buberl said: “This transaction is another important step in the execution of our Ambition 2020 strategy, as we concentrate on businesses with critical scale and continue to simplify our business profile.

“We are extremely pleased to maintain our strong historical links through a continued partnership with AXA Bank Belgium, a key factor in this transaction, and to extend this partnership to Crelan’s network.

“Combining this with the transfer of Crelan’s insurance business to AXA, our leadership position in our preferred segments in Belgium will be further reinforced.

“We are convinced that AXA Bank Belgium will strongly benefit from the consolidation with Crelan, leveraging on their respective scales and product offerings.”

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Furthermore, AXA will acquire a 9.9% minority equity stake in Crelan and AXA Bank Belgium for around €90m.

Subject to regulatory approval, the translations is expected to conclude in the second quarter of next year.

AXA and Crelan have also inked a bancassurance pact that will extend their partnership to the whole Crelan network.