AMP LIMITED — M&A Activity 2009

Dec 13, 2009

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ASX Announcement
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14 December 2009

Manager Manager Company Announcements Office Market Information Services Section Australian Securities Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand Announcement No: 66/09 AMP Limited (ASX/NZX: AMP) (also for release to AMP Group Finance Services Limited (ASX: AQNHA & NZX: AQN010))

AMP increases offer for AXA Asia Pacific and declares offer price best and final

Part Two: Investor information

AMP Limited (AMP) ASX Announcement AMP Limited Level 24, 33 Alfred Street Sydney NSW 2000 Australia

ABN 49 079 354 519

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AMP’s revised proposal
for AXA Australia & New
Zealand
Craig Dunn
Chief Executive Officer
14 December 2009
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AMP and AXA SA proposal for AXA Asia Pacific Holdings – offer price best and final

• Improved joint proposal from AMP and AXA SA values AXA Asia Pacific Holdings (AXA AP) shares at A$6.221 – an A$0.88 per share increase – which reflects:

• A$515 million (A$0.54 per share) increase in cash consideration, with AXA SA contributing A$415 million and AMP contributing A$100 million

• 2

• � A$0.34 increase in value of AMP shares since original proposal

• AXA AP independent directors are yet to reach decision on revised proposal – offer price declared best and final by AMP and AXA SA

• 3

• � Proposal open to 21 December 2009

• If accepted, proposal subject to satisfactory reciprocal due diligence, court, regulatory and shareholder approvals

• Based on AMP’s VWAP since original proposal announced on 9 November 2009 of A$6.24 2. Based on difference between AMP closing share prices of A$5.75 on 5 November 2009 and AMP VWAP since original proposal announced on 9 November 2009 of A$6.24

• If AXA AP independent directors do not accept and recommend revised proposal to minority shareholders and AXA AP does not execute legal 2 documentation by 21 December 2009, AMP and AXA SA will regard the AXA AP independent directors as having rejected it and the proposal will lapse

1

Revised proposal is straightforward and fairly values Australasian and Asian assets of AXA AP

• AMP will acquire AXA AP’s Australian and New Zealand businesses – 1

• on ungeared basis – for A$4.4b, using scrip (A$4.1b ) and cash (A$315m)

• 2

• � Represents price to embedded value of 1.3x and price to 3

• earnings multiple of 18.6x

• Proposal remains marginally EPS accretive by second full year after acquisition[4] , assuming annual net synergy benefits of A$120m and integration costs of A$285m, both after tax

• AXA SA will acquire AXA AP’s Asian businesses for A$9.1b

• AXA AP debt of A$1.2b[5] to be assumed and retired by AXA SA

• AXA SA will fully subscribe to or underwrite Tier 2 A$600m subordinated debt issued by AMP

• Based on AMP’s VWAP since original proposal announced on 9 November of A$6.24 2. Based on AXA AP’s disclosed traditional EV for A&NZ businesses @ 30 June 2009, using a 10% equity return rate and including estimated net worth to be assumed by AMP of A$635m before allocation of capitalised corporate expenses

• Based on a purchase price of A$4.4 billion and assumes that FY2010 operating earnings and investment income of the Australian and New Zealand businesses of AXA AP will be A$261m which is the average of the eight analyst forecasts for those earnings and that income published since 1 December 2009 (post AXA AP’s strategy briefing) which ranged from A$180m to A$233m for operating earnings and A$57m to A$60m for investment income, with an estimated A$24m in corporate office overlay assumed to relate to the Australian and New Zealand

• Australian and New Zealand businessesBased on FY2012 analysts’ consensus for operating earnings and investment income, with assumed A$24m in corporate office overlay relating to the 3

• Based on AUD/USD 0.9169 on 11 December 2009

Increased proposal provides compelling value for AXA AP minority shareholders

• 1

• � Proposal a 53% premium to AXA AP share price on 5 November and offers improved value and certainty � Minority shareholders would receive 0.6896 AMP shares and A$1.92 in cash for each AXA AP share

• 2

• � 31% of total consideration is in cash and no longer subject to movements in AUD/USD exchange rate

• Mix and match option would allow shareholders to elect a greater 3

• portion of their consideration in cash or AMP shares

• Proposal ensures minority shareholders:

• Receive immediate value for shareholding

• Retain exposure to high growth Australian wealth management market

• Share in upside of Australia’s largest wealth management company, including synergies from the merged group

• Participate in AMP’s historically higher franking capacity and dividend yield

• 1.2. Based on implied revised offer price of A$6.22 and AXA AP’s closing share price of A$4.08 on 5 November 2009 Based on AMP’s VWAP since original proposal announced on 9 November 2009 of A$6.24 4 3. Subject to total available pool of AMP shares and cash

2

Increased proposal provides compelling value for AMP shareholders

• Revised proposal continues to meet AMP M&A criteria

• Strategic : creates leading independent wealth management company; adds significant scale, strengthening the competitiveness of core business; broadens distribution footprint; enhances earnings potential and diversity

• Economic : remains marginally EPS accretive in second full year after acquisition and strongly accretive thereafter

• Well understood risks : core business in local markets

• Accelerates AMP’s growth strategy

• Creates fifth pillar in Australian financial services

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Summary of proposed financial transactions

3,991 (8,239) A$ per share A$m Total acquisition price for AXA A&NZ businesses (debt free) AXA AP sale of Asian business to AXA SA (including Asian debt) 12,230 Total enterprise value of AXA AP 1,182 Plus AXA AP corporate debt on issue to AXA SA 5.34 AMP acquires 100% of AXA AP shares 11,048 9 November 2009 1 2	3,991 (8,239) A$ per share A$m Total acquisition price for AXA A&NZ businesses (debt free) AXA AP sale of Asian business to AXA SA (including Asian debt) 12,230 Total enterprise value of AXA AP 1,182 Plus AXA AP corporate debt on issue to AXA SA 5.34 AMP acquires 100% of AXA AP shares 11,048 9 November 2009 1 2	3,991 (8,239) A$ per share A$m Total acquisition price for AXA A&NZ businesses (debt free) AXA AP sale of Asian business to AXA SA (including Asian debt) 12,230 Total enterprise value of AXA AP 1,182 Plus AXA AP corporate debt on issue to AXA SA 5.34 AMP acquires 100% of AXA AP shares 11,048 9 November 2009 1 2	6 4,098 1,829 4.30 1.92 4,413 (9,626) 14,040 1,176 12,864 6.22 5,927 6.22 A$m A$ per share 14 December 2009 3 6 3 4 5
		A$m	A$ per share
		3,991 (8,239) 12,230 1,182 11,048 1 2	6.22
Composition of payment to AXA AP minority shareholders AMP scrip – 0.6896 AMP shares for each AXA share Cash component Total NOTE: Numbers impacted by rounding 1. Based on AMP closing share price of A$5.75 on 5 November 2009 and total A 2. Based on AUD/USD exchange rate of 0.9097 on 5 November 2009 3. Based on AMP’s VWAP since original proposal announced on 9 November 2 4. Based on AUD/USD exchange rate of 0.9169 on 11 December 2009 5. Based on A$9125m equity value and A$501m debt	3.97 1.38 1	3,777 1,314 5,090 capital of 2,067m shares	4.30 1.92 3
	5.34 XA AP issued 009 of A$6.24		6.22

1. Based on A$9,125m equity value and A$501m debt

2. Representing 656.8m AMP shares at AMP VWAP of A$6.24 on 11 December 2009, plus A$315m cash

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Overview of offer calculations
9 November 20099 November 2009 14 December 20097 December 2009
A$ per share A$m A$ per share A$m
Proposal 0.6896 AMP shares per AXA AP share 3.971 4.302
Cash per AXA AP share 1.38 1.92
Total consideration per AXA AP shareImplied value of AXA AP equity 5.34 11,048 6.22 12,8643
Debt attributable to AXA A&NZ 677 6754
Debt attributable to AXA Asia 505 5015
Total AXA AP debt 1,182 1,176
Implied enterprise value for AXA AP 12,230 14,040
Transaction for AMP
AMP acquires AXA A&NZ on debt-free basis 3,991 4,413 +11%
Acquisition funded through:
Share issue 3.97 3,777 4.30 4,0986
Cash payment for remaining purchase price 0.23 215 0.33 315
Transaction for AXA SA
Acquisition of 100% of AXA AP Asia equity 7,734 9,125 +18%
Acquisition funded through:
Sale of 54% of AXA AP equity 5,958 6,936
Retirement of A&NZ debt 677 675
Cash payment for remaining purchase price 1.15 1,099 1.59 1,514
Total consideration to minority shareholders
AMP shares 3.97 3,777 4.30 4,098
Cash 1.38 1,314 1.92 1,829
Total 5.34 5,090 6.22 5,927 +16%
NOTE: Numbers impacted by rounding1. Based on AMP closing share price of A$5.75 on 5 November 2009 4. Includes A$430m plus USD denominated debt of US$225m, converted at AUD/USD 0.9169 on 11 December 2009
2. Based on AMP’s VWAP since original proposal announced on 9 November 2009 of A$6.24 5. Includes HKD and USD denominated debt of US$459m, converted at AUD/USD 0.9169 on 11 December 2009 7
3. Based on total AXA AP issued shares of 2,067m 6. Minority shares outstanding of 952m
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Timeline
Event Expected timing
Proposal deadline 21 December 2009
AXA scheme of arrangement1
� 1 [st] court hearing March 2010
� Shareholder meeting April 2010
� 2 [nd] court hearing April 2010
Australian and overseas regulatory approvals April 2010
Deal completion May 2010
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1. Subject to agreement of timing with AXA AP
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