AMP LIMITED — M&A Activity 2009

Nov 8, 2009

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ASX Announcement
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9 November 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: 61/09 AMP Limited (ASX/NZX: AMP) (also for release to AMP Group Finance Services Limited (ASX: AQNHA & NZX: AQN010))

AMP proposed merger with AXA’s Australian & New Zealand businesses

Part One: 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 proposal to
acquire AXA Australia
& New Zealand
Craig Dunn
Chief Executive Officer
9 November 2009
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AMP has made a compelling proposal to acquire AXA Asia Pacific Holdings

• AMP and AXA SA have made a joint proposal to acquire AXA Asia Pacific Holdings (AXA AP) at a 31% premium1

• Under the proposal:

• AMP will acquire AXA AP and merge its Australian and New Zealand businesses into its own

• AXA SA will acquire AXA AP’s Asian business

• AXA SA has agreed to an exclusivity arrangement with AMP in relation to the acquisition of the AXA AP Asian business

• Independent directors of AXA AP have advised the proposal is inadequate

• Based on closing share prices of both companies at 5 November 2009. Proposed offer represents a 28% premium based on the one-month volume weighted average price (VWAP) of AXA AP and AMP ordinary shares and a 31% premium based on the three-month VWAP of both 2 shares

1

AMP’s and AXA SA’s joint proposal

• AMP proposes to acquire AXA Asia Pacific Holdings’ (AXA AP) Australian and New Zealand businesses for A$4b, using scrip (A$3.8b1) and cash (A$215m)

• This represents a price to embedded value2 of 1.2x and price to earnings multiple3 of 16.6x

• AXA SA proposes to acquire AXA AP’s Asian businesses for US$7.036b[4] , which represents a price to embedded value[5] of 2.1x and price to earnings multiple[6] of 19.0x

• AXA AP minority shareholders would be offered A$5.341 per share, comprising 0.6896 AMP shares and A$1.38 in cash7

• Proposal8 has only limited conditions, including reciprocal due diligence, court, regulatory and shareholder approvals. There are no financing or market based conditions

• Offer remains open but can be withdrawn by AXA SA and/or AMP at any time

• Based on the closing price of AMP shares on 5 November 2009 of A$5.75 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 purchase price of A$4b and FY2010 analysts’ consensus for operating earnings and investment income, with assumed A$24m in corporate office overlay relating to the Australian and New Zealand businesses

• In addition to A$1.2b AXA AP debt to be retired by AXA SA. Based on AUD/USD of 0.9097 as at 5 November 2009 5. Based on AXA’s disclosed traditional EV for Hong Kong and Asia businesses @ 30 June 2009 using a 10% equity return and including estimated net worth to be assumed by AXA SA of A$815m before allocation of capitalised corporate expenses and net of debt of US$459m

• On a geared basis, based on FY2010 analysts’ consensus for operating earnings and investment income 7. Subject to AUD/USD; see slide 13 for details 3 8. By way of scheme and shareholder approved acquisition

Value for AXA AP shareholders

• Proposed offer represents a premium of 31%1

• Proposal ensures AXA AP minority shareholders:

• Retain exposure to the high growth wealth management market in Australia

• Share in upside of the combined wealth management company, with substantial annual synergy benefits and enhanced earnings potential

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

• Gain exposure to AMP’s growing Asia-Pacific funds management footprint

• Based on closing share prices of both companies at 5 November 2009. Proposed offer represents a 28% premium based on the one-month volume weighted average price (VWAP) of AXA AP and AMP ordinary shares and a 31% premium based on the three-month VWAP of both shares 4

2

Value for AMP shareholders

• Expected to be marginally cash EPS accretive by second full year after acquisition, assuming annual net synergy benefits of A$120m and integration costs of A$285m, both after tax

• Represents price to embedded value1 of 1.2x and price to earnings multiple2 of 16.6x

• Creates leading, independent high growth wealth management company, with enhanced earnings potential

• Accelerates AMP’s growth strategy and meets clear M&A criteria

• Based on AXA’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 purchase price of A$4b and FY2010 analysts’ consensus for operating earnings and investment income, with assumed A$24m in 5 corporate office overlay relating to the Australian and New Zealand businesses

Proposal to acquire 100% of AXA AP’s Australian & NZ businesses

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AXA AP’s Australian AXA AP’s New Zealand AXA AP’s Asian
businesses businesses businesses
• Diversified risk insurance business – • Risk insurance business – NZ$177m • Life insurance and wealth management
A$652m in-force premiums in-force premiums businesses in Hong Kong, Singapore
Business overview 1 •• Wealth management businesses with Mature book in run-off with A$11b in A$26b in AUMAUM 2 2 •• Wealth management business –Over 400 aligned plannersNZ$6b in AUM and other parts of Asia
• Broad advice footprint, with 1,600+
aligned and owned planners & 6,500
non-aligned advisers supporting AXA
product
OwnershipPre- Australian businesses 100% owned by AXA3 NZ businesses 100% owned byAXA3 Asian businesses 100% owned byAXA3
acquisition
Post- 100% AMP 100% AXA SA
acquisition
24%4 76% 4
Former AXA AP minority shareholders Existing AMP shareholders
1. Source: 1H 09 AXA Investor Compendium and Morningstar Market Share – June 2009
2. Proposal is that at least A$15b of this total AUM will transfer to AMP Capital Investors, along with some multi-manager funds and assets under
administration. See slide 8 for more details. Balance to remain with AllianceBernstein and other external fund managers
3. AXA currently owned 54% by AXA SA and 46% by AXA AP minority shareholders 6
4. Based on issuing 656.8m AMP shares to AXA AP minority shareholders
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3

AMP would become leading player in world’s fastestgrowing wealth management market3

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Australian superannuation market - A$b¹
14001200 CAGR 11% 1,195 1,142 1,077 • and fastest-growing pension marketAustralia is world’s 5 3 [th] largest
1000 922 • Growth underpinned by
800 631 763 government mandate, resilient economy, ageing
600 demographics and growing
400 population
200 • New Zealand superannuation
0 assets NZ$57b 4 and growing
2004 2005 2006 2007 2008 2009 with KiwiSaver
Australian life insurance market - A$b [2]
CAGR 13%
876 5.8 6.5 7.6 • Insurance market also growing strongly, reflecting significant
5.2 under-insurance in Australia and
5 4.7
4 4.1 New Zealand
3 • New Zealand in-force premiums
2 NZ$1.4b 5
1
0
2004 2005 2006 2007 2008 2009
1.2. APRA quarterly superannuation performance, June 2009 Plan for Life detailed risk statistics, June 2009 3.4.5. ISI Statistics, June 2009Watson Wyatt Global Pension Assets Study, January 2009Reserve Bank of NZ, June 2009 7
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Transaction would create new wealth management force

	As	at 30 June 2009				AMP	AXA Australia/NZ	Combined
Financial planners
		Aligned &/or				2,090	2,030	4,120
		owned				1,710 in Australia	1,632 in Australia	3,342 in Australia
		IFA access				< 1,000 in Australia	6,500 in Australia	Access to at least 7,500
							1,000 in NZ	planners in Australia and NZ
Australian market share
		Risk insurance 1				9.1% #5	8.4% #7	17.5% #1
		Retail superannuation 2				17.8% #2	5.8% #7	23.6% #1
		Retirement income	2			11.4% #3	6.2% #6	17.6% #1
		Unit trusts (ex CMTs) 2				3.6% #10	5.8% #5	9.4% #5
Inforce/AUM
		Individual/group risk				A$713m	A$652m	A$1,365m
		in-force premiums				NZ$139m	NZ$177m	NZ$316m
		Wealth management				A$44b	A$26b	A$70b
						NZ$5b	NZ$6b	NZ$11b
		Mature book				A$18b	A$11b	A$29b
Assets under management 3						A$104b #2	A$38b 5	A$142b #2
1. 2. 3.		Plan for Life detailed risk statistics – June 2009 Plan for Life retail and wholesale QDS – June 2009 Source for market ranking: Rainmaker Roundup March 2009 5.					Of AXA AP’s total A$59b AUM in Australia and New Zealand, A$15b is expected to transfer directly to AMP Capital Investors; around A$12b in multi- manager funds will complement AMPCI’s multi-manager funds; a further
4.		Source for all other information: AMP Investor Compendium June 2009	Investor Report and AXA				A$4b will be added to AMP platforms in external manager options and around A$7b is expected to move across in other structures. The balance will		8
							remain with AllianceBernstein and other external fund managers

4

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Combined AMP and AXA would hold leading
market share positions
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Market share - Australian retail superannuation market Market share - Australian retirement income market
Source: Plan for Life Retail & Wholesale QDS, June 2009 Source: Plan for Life Retail & Wholesale QDS, June 2009
25% 23.6% 20% 17.6% 17.1%
20% 19.3% 17.8% 15% 13.2%
15%10% 13.6% 10.4% 9.5% 10% 11.4% 10.2% 9.3% 6.2% 6.1%
6.1% 5.8% 5.6% 5% 4.9% 4.4%
5%
0% 0%
Market share - retail managed funds (excluding CMTs) Individual risk market share - June 2009
Source: Plan for Life Retail & Wholesale QDS, June 2009 Source: Plan for Life Detailed Risk Statistics (in-force premiums), June 2009
20%15%10%5% 18.1% 15.5% 13.6% 12.3% 11.2% 8.4% 5.8% 5.3% 5.0% 3.3% 0.250.150.20.1 20.1% 19.1% 15.1% 11.3% 10.9% 9.9% 9.2% 7.5% 6.8%
0.05 3.4%
0%
0
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AMP & AXA NAB/MLC/Aviva AMP CBA/Colonial WBC/BT ANZ/ING Mercer AXA IOOF AMP & AXA CBA/Colonial NAB/MLC/Aviva AMP WBC/BT ANZ/ING AXA IOOF Challenger Macquarie
AMP & AXA NAB/MLC/Aviva CBA/Colonial AMP WBC/BT ANZ/ING AXA IOOF Macquarie Mercer AMP & AXA NAB/MLC/Aviva CBA/Colonial ANZ/ING AMP Tower AXA Asteron WBC/BT Zurich
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Would create leading financial advice footprint

Total number of Australian financial planners*

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 Combined group will have
Combined 19% more than 3,000 aligned and
AMP owned planners in Australia –
10% 19% of total planner market
AXA
9%  In addition, 6,500 IFA
planners offer AXA products
ANZ/ING  This gives the combined
9% group access to almost
Other
50% 10,000 planners in Australia
CBA/Colonial
7%
WBC/SGB
6%
NAB/MLC
9%
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Money Management Top 100 Dealer Survey, June 2009; AMP 1H 09 Investor Report; AXA 1H 09 Investor Compendium. 10
Based on total planner numbers of 16,900
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5

Proposed acquisition meets AMP’s clear M&A criteria

• Becomes leading independent wealth management company

• Adds significant scale and strengthens competitiveness of AMP’s core business

• Enhances capacity to respond to changing consumer and regulatory environment

• Balances AMP’s leading position in superannuation with equally strong

• Strategic position in risk insurance  Strengthens aligned advice footprint in Australia and NZ, increasing platform scale and flexibility

  • Accelerates AMP’s drive to broaden distribution in IFA market

  • Provides multi-brand advice options to better service market segments, including enhanced offering in HNW and SMSF segments

  • Enhances scale of asset management business

• Attractive financial metrics

• Economic  Marginally cash EPS accretive in second full year after acquisition  Substantial synergy benefits  Well understood core businesses in local markets

• Well understood  Clear integration path would use strength of both businesses to build a

• risks new market force 11

Attractive financial metrics

• Estimated annual net synergy benefits of A$120m with estimated integration costs of A$285m, both after tax

• Synergies  Creates other growth opportunities not reflected in these synergies (eg wrap platform options, HNW & SMSF opportunities)

• Expected to be marginally cash EPS accretive in second full year after acquisition

• AXA SA would fully subscribe to Tier 2 A$500m subordinated debt issued by AMP: - integration costs of A$285m

• • cash payment by AMP to AXA AP shareholders of A$215m

• Scrip offer involves issuing 656.8m AMP shares

• Financials  AXA SA would retire AXA AP’s corporate debt A$1,182m1  AMP group would remain soundly capitalised post acquisition - Gearing and interest cover remain within S&P credit guidelines

• for an A rated company - AMP would maintain dividend payout ratio of 75%-85% of

• underlying profit on expanded capital base - AXA AP shareholders will receive the final 2009 dividend, if declared, from AXA AP, capped at 9.25 cents per share 12

• 1. Combination of AUD and USD debt at 30 June 2009

6

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Summary of proposed financial transactions
Summary of proposed transaction
(as at 5 November 2009) A$ per share A$m
AMP acquires 100% of AXA AP shares $5.34 1 11,048 2
Plus AXA AP corporate debt on issue to AXA SA 1,182
Total enterprise value of AXA AP 12,230
AXA AP sale of Asian business to AXA SA (including Asian debt) (8,239) 3
Total acquisition price for AXA A&NZ businesses 3,991 4
Payment to AXA AP minority shareholders comprises: A$ per share
AMP scrip – 0.6896 AMP shares for each AXA shareCash component 3.96521.379665
Total $5.3448
1. This price will vary with AMP’s share price and AUD/USD currency movements
2. AXA SA share is A$5.958b (based on 53.92% of issued capital)
3. Based on US$7,036m equity value and US$459m debt at AUD/USD of 0.9097 as at 5 November.
4. Representing 656.8m AMP shares at closing price of A$5.75 on 5 November 2009, plus A$215m in cash
5. Based on AMP closing share price of A$5.75 on 5 November 2009
6. The cash component is subject to movements in the AUD/USD exchange rate. The A$1.38 cash amount is based on an AUD/USD exchange rate of
0.9097, equivalent to a USD/AUD exchange rate of 1.0993 (ie one US dollar acquires 1.0993 Australian dollars). For every 0.01 appreciation in the
USD/AUD from 1.0933, AXA AP minority shareholders will receive additional cash per share of A$0.03 per share. For every 0.01 depreciation in the
USD/AUD exchange rate from 1.0993, the cash payment will reduce by A$0.03 per share. The cash payment will be subject to a guaranteed
minimum, set on the announcement of a definitive transaction and calculated to protect AXA AP minority shareholders from any adverse movement in FX from announcement beyond 5%. An AUD/USD exchange rate of 0.9097 at announcement would equate to a minimum cash payment of A$1.21 13
per share
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Appendix
14
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7

Overview of proposal calculations

Overview of proposal calculations	Overview of proposal calculations
A$ per share		15 1,182 1,099 677 3,777 5,958 5,090 1,314 3,777 3,991 12,230 11,048 677 215 505 7,734 A$m as at 5 November 5 November 2009)
Total AXA AP debt Cash payment for remaining purchase price Retirement of A&NZ debt AMP shares Total consideration to minority shareholders Sale of 54% of AXA AP equity Acquisition funded through: Total Cash Share issue 5 Acquisition funded through: AMP acquires AXA A&NZ on a debt-free basis Transaction for AMP Implied EV for AXA AP Implied value of AXA AP equity under proposal 2 Debt attributable to AXA A&NZ 3 Implied EV Cash payment for remaining purchase price Debt attributable to AXA Asia 4 Acquisition of 100% of AXA AP Asia equity Transaction for AXA SA Proposal Total consideration per AXA AP share $1.3796 cash per AXA AP share 0.6896 AMP shares per AXA AP share 1 1. Assumes AMP closing price as at 5 November of A$5.75 2. Total AXA AP shares outstanding of 2,067m 3. Includes A$430m plus USD denominated debt of US $225m, converted at AUD/USD 0.9097 (WM/Reu 2009) 4. Included HKD and USD denominated debt of US$459m, converted at AUD/USD 0.9097(WM Reuters 1 5. Minority shares outstanding of 952m	1.15 3.97 5.34 1.38 3.97 0.23 5.34 1.3796 3.97 ters 10am Fixing 0am Fixing as at

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AMP and AXA risk insurance business mix
AMP - Australian insurance business AXA - Australian insurance business
Total inforce of A$693m 1 Total inforce of A$645m 1
Group life
18%
Group life
26%
Individual lump sum
Individual lump sum Income protection 44%
65% 17%
Income protection
30%
AMP & AXA - Australian insurance business
Total inforce of A$1,338m
Group life
22%
#4
Individual lump sum
55%
#1
Income
protection
23%
#2
1. Plan for Life detailed risk statistics, June 2009 16
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8

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AMP and AXA AUM mix
AMP - Australian wealth management mix AXA - Australian wealth management mix
AUM $52.3b 1 AUM $24.8b 1
Other Other
1% 1%
Retirement income20% Unit trust and investment8% Retirement income23% Unit trust and investment 28%
Retail superannuation
and rollovers71% Retail superannuationand rollovers
48%
AMP & AXA - Australian wealth management mix
AUM $77.1b
Other
1%
Retirement income Unit trust and investment
21% 14%
Retail superannuation and
rollovers
64%
17
1. Plan for Life Retail & Wholesale QDS, June 2009
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9