Allianz Offers $7 Billion for Remaining RAS Shares; Plans Restructuring

Germany’s Allianz AG announced an offer to shareholders of Riunione Adriatica di Sicurtà (RAS) S.p.A for the approximately 45 percent of the shares it doesn’t already own. At 19 euros ($23.35) per share that makes the offer worth around 5.7 billion euros ($7 billion).

Assuming the offer is successful, Allianz said it plans to merge AS into Allianz and restructure both entities as a “European Company,” or “SE – Societas Europaea.” Allianz said the move is part of its plan to reposition itself and further strengthen its position “as a leading financial services provider in its European home market.” It described the merger with RAS as “a cornerstone of this repositioning.”

The decision immediately caused a stir in France, where Allianz holds a majority stake in Assurances Générales de France (AGF). French media said Allianz has no immediate plans to make a similar offer to AGF shareholders. But it would seem logical, if you’re creating a “European Company,” to include French holdings as much as Italian ones. Shares in AGF rose 2.3 percent on Monday, fueled by the speculation.

“The full acquisition of RAS will enable Allianz in the future to reorganize its Italian activities and to directly reallocate the holdings of operations to Allianz Holding in key European markets, such as Austria, Switzerland and Spain,” said the announcement.
Allianz also indicated that it plans “to consolidate the insurance activities of the Allianz Group in Germany under one German holding company to be newly created.”

“If you want to play in the premier league of international financial services providers, you need a strong base in your home market. Our home market is Europe,” stated CEO Michael Diekmann. ” With the measures initiated today we create the necessary prerequisites to ensure our competitiveness going forward. We want to consistently take advantage of our growth opportunities across borders.”

The bulletin noted that the Allianz Group generated almost 14 billion euros ($17.22 billion) in revenue from premiums in the Italian market, the Group’s second most important European insurance market after Germany. Allianz is represented in Italy by RAS and Lloyd Adriatico and currently holds the number two position in the Italian insurance market. Allianz currently holds 55.4 percent of RAS and 99.7 percent of Lloyd Adriatico. “By fully integrating RAS, Allianz expects to increase profitability and customer service,” said the announcement.

Discussing the conversion of the company into a SE, Allianz said it would further simplify and focus the structures of the entire Group. It noted that “the future Allianz SE will be the first European Company in the DJ EURO STOXX 50 listed as stock corporation under European law.”

“With this repositioning we will be able to reduce the complexity of the entire Group. It is the logical next step of our 3+One program,” Diekmann noted. Allianz SE will continue to have its legal seat in Munich.