SAI-Fondiaria Merger Completed; Premafin to Sell Shares

December 31, 2002

The long delayed merger between Italian insurers SAI and La Fondiaria was officially completed over the weekend, except for a few “details.”

Last week’s ruling by Consob, the Italian stock market regulator, requires the merged company’s largest shareholders, the industrial group Premafin and the investment bank Mediobanca, to divest themselves of 9.9 percent of the stakes they hold in SAI-Fondiaria by February 18.

The ruling followed a similar decision earlier in the month that the two had colluded in arranging the merger, and were required to reduce their holdings in La Fondiaria from around 43 percent to under 30 percent.

Premafin, which is controlled by the Ligresti family, is SAI’s largest shareholder. On Monday the group announced that it would sell 5.15 million shares in the new company, approximately 4 percent of the total, in order to comply with the ruling.

Mediobanca has not yet revealed any plans to divest itself of the remaining 6 percent needed to meet Consob’s order, and, although Premafin apparently notified the bank of its decision, it has not as yet indicated what it will do.

Consob’s decision validates claims made by minority shareholders that the two companies effectively controlled more than 30 percent of La Fondiaria’s shares when the merger between it and SAI was approved. Under Italian law an offer should have therefore been made on the same terms and conditions to all shareholders.

Assuming no further delays, the newly merged companies will become Italy’s third largest insurance group behind Generali and Allianz’ RAS SpA.

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