The boards of AXA and its holding company FINAXA have agreed to initiate a study into the particulars of AXA absorbing FINAXA through a share exchange process. A committee of independent directors has been appointed to carry out the study. For AXA and its shareholders, the merger would simplify shareholder structure, improve the standing of the stock and increase the proportion of the publicly traded shares, the insurer said in a statement. In addition, as a result of this transaction, AXA would directly own its brand, which is currently the property of FINAXA and for which AXA pays an annual fee of approximately E6.6 million. The AXA Group statement added that for FINAXA shareholders, the transaction would improve the liquidity of their securities and would eliminate the holding company discount which currently affects the valuation of these securities. The final exchange ratio and the other terms and conditions of the transaction are subject to approval by the respective boards of AXA and FINAXA, based on the recommendation of the committees of independent directors and subject to the approval of AXA and FINAXA shareholders. The final terms and conditions of the merger, including the exchange ratio, should be known before the end of the second quarter of 2005. It is expected that the merger would be presented to both AXA and FINAXA shareholders for approval before the end of 2005.