Credit Suisse Group today announced that it has entered into a definitive agreement for the sale of its insurance business, Winterthur Swiss Insurance Company, to AXA for a cash consideration of 12.3 billion Swiss francs (US$9.93 billion).

AXA will acquire 100% of Winterthur. The transaction is subject to customary regulatory approvals and closing conditions and is expected to close around year-end 2006.

The sale of Winterthur follows Credit Suisse Group’s decision in 2004 to focus its growth strategy on an integrated global banking business model. For the past two years, Credit Suisse Group has been managing Winterthur as a financial investment and preparing it for a capital market transaction.

Under the terms of the transaction, Credit Suisse Group will receive a cash payment of CHF 12.3 billion. AXA will also redeem £500 million of inter-company hybrid debt currently outstanding between Credit Suisse Group and Winterthur.

Credit Suisse Group expects to record a gain from the sale of Winterthur. The actual gain on sale will be dependent upon the accrued book value of Winterthur at the time of closing.

Oswald Grübel, CEO of Credit Suisse Group, said, “We plan to reinvest the proceeds from the sale of Winterthur in the development of our banking businesses. Our growth plans are focused on organic growth opportunities and selected acquisitions and joint ventures in our investment banking, private banking and asset management businesses. However, we have no intention of making any transforming acquisitions.”

“We will invest the capital from the sale of Winterthur to compensate for the loss of earnings,” he added. “We confirm our net income target for 2007 of CHF 8.2 billion, assuming a stable market environment. Any excess capital that cannot be used to grow our business will be returned to our shareholders.”

Henri de Castries, Group CEO of AXA, said, “This transaction is a unique opportunity to reinforce our leading position in our core European market and to increase our presence in emerging markets, notably in Eastern Europe and in Asia. The complementarity of our organizations and the strong cultural fit between our teams will facilitate the integration of Winterthur and will drive value creation for our shareholders. I am confident that Winterthur’s professionals will contribute very positively to our company.”