Helvetia Holding AG and Baloise Holding AG hired strategy consultant McKinsey for advice on Europe’s biggest insurance deal this year, according to people familiar with the matter.
McKinsey is set to earn tens of millions of Swiss francs from the multi-year project which is one of the largest consulting contracts currently in Switzerland, the people said, asking not to be identified, because the mandate hasn’t been publicly announced.
The deal, which is creating the second-largest insurer in Switzerland, is expected to complete by 2028.
Read more: Shareholders of Swiss Insurers Helvetia and Baloise Approve Merger
“Helvetia does not comment on contractual relationships. However, we can confirm that we are engaging external advice in connection with the planned merger,” a spokesperson for Helvetia said.
McKinsey and Baloise declined to comment.
Announced in April, the combination between the two insurance companies from St. Gallen and Basel, marked one of the biggest deals in European finance this year.
McKinsey employs just under 500 people in Switzerland and competes with the likes of Boston Consulting Group, Oliver Wyman and local competitors in the country for corporate projects on topics ranging from post-merger integration to cost cutting to strategy.
The demise of Credit Suisse and its rescue takeover by UBS Group AG has made the landscape even more competitive for consulting firms in Switzerland which benefitted from having two major banks as potential clients.
The combined company will have a business volume of around $25 billion (20 billion Swiss francs) across 8 countries.
The insurers have said the merger will result in 350 million Swiss francs of annual cost savings and will include layoffs, Helvetia Chief Executive Officer Fabian Rupprecht has said.
The firms expect roughly 500 million to 600 million Swiss francs of integration costs in the coming years, most of which will be incurred by 2028. As a result, the executives see an additional cash generation of roughly 220 million francs.
Together, Helvetia Baloise Holding Ltd. will have a combined market share of about 20% across its life, property and casualty business lines, according to filings.
Photograph: The Helvetia Holding offices in Basel, Switzerland. Photo credit: Stefan Wermuth/Bloomberg
Topics Mergers & Acquisitions
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