Allianz[2] announces having entered into share purchase agreements with shareholders representing 11.34% of Euler Hermes share capital on November 24, 2017 for a price of 122 euros per share in cash, as a result of which Allianz will own 74.34% of Euler Hermes share capital and voting rights[3].

Allianz[4] intends to launch a simplified cash tender offer to acquire all outstanding Euler Hermes shares not already owned by Allianz and held by minority shareholders. The consideration for one Euler Hermes share will be 122 euros in cash. This constitutes a premium of 20.7% on Euler Hermes share closing price on 24 November 2017 and of 22.9%, 22.2% and 30.8% compared to three, six and twelve month volume weighted average Euler Hermes share price.

Euler Hermes is the leading global trade credit insurer and a core component of Allianz global lines business. Underwriting excellence proven through the cycle, risk analysis and integrated global structure together with a strong and experienced management team provides the basis for Euler Hermes’ long-term growth prospects in trade credit insurance, bonding and selected other specialties. Increasing ownership in Euler Hermes is therefore a logical step for Allianz to deploy capital in strategic businesses delivering solid operating performance, and to strengthen positions in core home markets and in property and casualty in particular.

Allianz has been and remains supportive of the strategy of Euler Hermes Board of Management. Allianz does not intend to change, as a result of the transaction, Euler Hermes Supervisory Board composition and Euler Hermes operating model beyond ordinary course of business.

Allianz intends to implement a squeeze-out procedure following the contemplated tender offer, in the event Allianz’s holding in Euler Hermes reaches 95%[5].

Given Euler Hermes stock’s limited market liquidity, contemplated transaction represents a historic and unique opportunity for Euler Hermes minority shareholders to fully realize their investments in Euler Hermes, at a premium to trading price. In the event that a squeeze-out procedure could not be implemented after the tender offer, Allianz would examine the possibility of a merger of Euler Hermes with Allianz or a company of Allianz Group and would then inform the French Autorité des marchés financiers (AMF) in the context of article 236-6 of the AMF general regulation relating to the potential implementation of a buy out offer.

The offer will have no impact on the announced share buy-back program of Allianz SE for 2018 in the amount of up to 2 billion euros. The contemplated transaction is expected to be immediately EPS accretive by around 1%[6] and to impact Allianz solvency position to the tune of -4%-points.

Allianz expects to formally file the tender offer in the coming weeks. Tender offer and the draft offer document will remain subject to the clearance of the French Autorité des marchés financiers (AMF).

[1] Excluding Euler Hermes shares owned by Allianz (63%) and Euler Hermes shares acquired by Allianz from shareholders of Euler Hermes (11.34%), and without taking into account 621,847 treasury shares representing 1.46% of Euler Hermes share capital (as of 31 October 2017)

[2] The acquisition will be completed through an entity of the Allianz Group.

[3] Calculated in accordance with article 223-11 of the AMF General Regulation.

[4] The offer will be initiated by Allianz SE and by, as the case may be, an entity of the Allianz Group.

[5] As determined under French rules.

[6] Assuming acquisition of 11.34% of Euler Hermes share capital prior to the tender offer and 100% acceptance rate of the residual float.