Gerling, HDI Break Off Talks

April 3, 2003

Negotiations between Gerling Group and HDI, two of Germany’s largest insurance companies, have apparently broken off with no agreement being reached.

Gerling, which is also in the process of trying to negotiate a sale of its reinsurance operations, (See IJ Website March 31) issued the following statement: “After several months of negotiations about a sale of the Cologne-based Gerling Group to the German insurer HDI Haftpflichtverband der Deutschen Industrie V.a.G in Hannover Gerling shareholders Dr. Rolf Gerling and Deutsche Bank cancelled the mutual letter of intent signed on 23 October 2002. The negotiating parties were unable to reconcile divergent views they have of the Gerling Group’s future.”

Dr. Gerling, who owns or controls 65.5 percent of the company, has been seeking a strategic partner for over a year, at the insistence of Deutsche Bank, which owns the rest of the shares. The troubles the company has had with its reinsurance operations has been one of the factors which has made it difficult to find a new majority shareholder able and willing to invest sufficient capital in Gerling’s ongoing primary insurance operations.

Other than confirming that the talks had been terminated, HDI had no comment. Gerling indicated that although it was no longer negotiating with HDI it “has thus regained the required flexibility to speed up its pursuit of alternative concepts.”

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