Allianz Moves Ahead with RAS Merger

December 30, 2005

German’s Allianz AG has released a series of documents in furtherance of its plans to merge its German and Italian operations into one European Group.

As announced last September (See IJ Website Sept. 13) Allianz plans to merge with Riunione Adriatica di Sicurtà (RAS) S.p.A by acquiring the remaining 45 percent of the Italian Company that it doesn’t already own.

On Dec. 16 Allianz announced that its Board of Management and the Board of Directors of RAS had agreed to the merger plan. Allianz said: “The exchange ratio is 3 Allianz shares for 19 RAS ordinary shares or 19 RAS savings shares. The exchange ratio is based on company valuations which are determined along with other determining factors on the basis of the Allianz Group generating forecasted consolidated net income amounting to €4.34 billion [$5.15 billion] and the RAS Group posting forecasted consolidated net income of €835 million [$990 million], both for the fiscal year 2005.”

The next step, which will be taken up at an extraordinary meeting of RAS ordinary shareholders as well as a special meeting of RAS savings shareholders on February 3, 2006, will finalize the merger and begin the next step in the process of restructuring both companies. Allianz will hold extraordinary shareholders meeting on February 8, 2006 for the same purpose.

Allianz ultimate goal is to “reposition itself as a European Company together with the Italian insurer RAS; the German insurance business will be consolidated under the holding company Allianz Deutschland AG.” The companies will become the core of a new “Societas Europaea,” or SE.

Allianz will become one of the first major companies to form a SE, a corporate structure designed to help businesses operate more efficiently through the European Union. Allianz has indicated the move is designed to 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.”

Allianz also expects the new structure to increase profits. The merger documents, published on Thursday, Dec. 29, indicated that net profits could rise by as much as 13 percent next year to €4.9 billion [$5.81 billion]; €5.4 billion [$6.4 billion] in 2007 and €5.9 billion [$7 billion] in 2008.

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