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AB's Shakeup Is a Reason to Pause, Not Panic

We maintain a Parent rating of Neutral.


Executive Summary
On May 1, 2017, French insurance conglomerate AXA Financial,  AllianceBernstein's (AB) majority shareholder, abruptly replaced CEO Peter Kraus as well as most of the firm's independent board members. The changes were significant, as Kraus was largely credited with helping the firm attain stability following the financial crisis. Moreover, the board housecleaning suggested a rupture between AXA and the firm's management over its future leadership and strategic direction. This raised questions about whether AXA would remain at arm's length or whether it would play a much more hands-on role in managing AB's affairs going forward.

Separately, on May 11, 2017, AXA announced that it would divest a portion of its stake in the firm's U.S. insurance operation in an initial public offering. As part of that transaction, AB would become a wholly owned subsidiary of the newly created public firm, reporting to the leader of that business.

Emory Zink does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.