XL Group is being bought by French multinational insurance company Axa in a $15.3 billion deal.

The merger agreement has been unanimously approved by the boards of Axa and Bermudian-based XL Group.

XL shareholders will receive $57.60 per share under the terms of the transaction, which represents a 33 per cent premium on Friday’s closing price.

Mike McGavick, chief executive officer of XL Group, said: “Today marks an unrivalled opportunity to accelerate our strategy with a new strength and dimension. With every confidence in how we have positioned XL Group for the future, it is a substantial testament to Axa’s leadership and commitment to maintaining the XL Group brand and culture that we have come to an alignment. We are excited at the opportunity to build the scale, geographical footprint, product portfolio, and the unmatched commitment to innovation that relevance in the global insurance industry requires. In Axa we have found like-minded partners committed to the absolute necessity to innovate and move this industry forward.”

In a statement outlining the agreement, the companies said the combination of Axa and XL Group “will propel the group to the number one global position in property and casualty commercial lines with combined 2016 revenues of €30 billion and total P&C revenues of €48 billion”.

Thomas Buberl, chief executive officer of Axa, said: “This transaction is a unique strategic opportunity for Axa to shift its business profile from predominantly L&S business to predominantly P&C business, and will enable the Group to become the number one global P&C commercial lines insurer based on gross written premiums. The transaction offers significant long-term value creation for our stakeholders with increased risk diversification, higher cash remittance potential and reinforced growth prospects. The future Axa will see its profile significantly rebalanced towards insurance risks and away from financial risks.

“XL Group has the right geographical footprint, world-class teams with recognised expertise and is renowned for innovative client solutions. Our combined P&C commercial lines operations, will have a strong position in the large and upper mid-market space, including in specialty lines and reinsurance, and will complement and further enhance Axa’s already strong presence in the SME segment. The two companies share a common culture around people, risk management and innovation, positioning Axa uniquely for the evolving future of the P&C industry.”

When the transaction is complete, the combined operations of XL Group, Axa Corporate Solutions, which is Axa’s large commercial P&C and specialty business, and Axa Art will be led by Greg Hendrick, currently president and chief operating officer of XL Group, who will be appointed CEO of the combined entity and join Axa Group’s management committee, reporting to Mr Buberl.

Mr McGavick will become vice-chairman of the combined P&C commercial lines operations and special adviser to Mr Buberl, to advise on integration-related and other strategic matters.

Completion of the transaction is subject to approval by XL Group shareholders and other customary closing conditions, including the receipt of required regulatory approvals, and is expected to take place during the second half of the year.