AMP, Axa Asia Pacific (Axa AP) and Axa SA have signed binding merger transaction documents, after the completion of due diligence by AMP.

This brings the successful merger of AMP with the Australian and New Zealand business of Axa AP a step closer to completion.

The transaction is still subject to approval from shareholders, the courts and federal Treasurer Wayne Swan.

Axa AP shareholders are expected to vote on the proposed merger in the first quarter of 2011.

Axa AP has now the opportunity to do due diligence on AMP.

Under the agreement, Axa AP is not allowed to talk to other interested parties or shop around for a higher bid.

The parties can still walk away from the deal if they become aware of an event that will have a material adverse effect on the transaction.

AMP can break the contract if Axa AP will experience a reduction in net assets by more than $200 million or a reduction of operating earnings by more than $23 million.

Yesterday, The Sydney Morning Herald ran an article saying AMP could hold off on signing the final papers as Axa could be exposed to a potential $2.6 billion claim over the unit pricing of certain life investment products of Axa AP's predecessor, National Mutual.

But question marks have been placed on the size of the exposure, as this would have to be disclosed under the Corporations Act.

Neither AMP nor National Australia Bank, whose bid was blocked by the Australian Competition and Consumer Commission earlier this year, has mentioned the case in any of their previous proposals.