Generali to take full control of Generali Deutschland Holding, Germany's second-largest insurer

This press release and any information contained herein shall not be published or distributed, directly or indirectly, in whole or in part, in or into the United States, Canada, South Africa, Australia, Japan, to “U.S. persons” (as defined under the U.S. Securities Act of 1933), or in or into any jurisdiction where any such publication or distribution would be prohibited by applicable law.

Generali to take full control of Generali Deutschland Holding, Germany’s second-largest insurer

• Agreement to purchase a 3% stake in Generali Deutschland Holding from private investors; squeeze-out of the outstanding 4% stake to be launched
• Delisting of Generali Deutschland expected in the first half of 2014
• To support the deal, placement of 15.5 mln Assicurazioni Generali treasury shares, consistent with the strategic focus on efficient capital and liquidity management

Trieste – The Generali Group intends to take full control of Generali Deutschland Holding, the management holding company of Germany’s second-largest insurance group, by purchasing the 7% minority stake.

Generali has agreed to acquire a 3% stake in Generali Deutschland Holding from a group of private investors, which will take it beyond the 95% equity stake threshold. Consequently, Generali intends to exercise its right and start the squeeze-out procedure of the outstanding 4% stake in order to take full equity control of the company.

Following this transaction, which is expected to be completed by the end of the first semester 2014, Generali will retain the entire net result of Generali Deutschland Holding, equal to €504 million in 2012 (*). In addition, after the transaction and the delisting of Generali Deutschland Holding’s shares, Generali expects to achieve tax efficiencies, arising from a fiscal unity to be subsequently implemented in Germany, and additional operational synergies. Including these efficiencies and depending on the squeeze-out price, the investment is expected to be accretive on an earnings per share basis.

To support the deal, today Generali started the placement of up to 15.5 million own shares, equating to approximately 1% of the share capital, in line with the Group’s goal to manage its capital and liquidity efficiently. Together with this placement, the acquisition of 7% of Generali Deutschland Holding will be broadly neutral in terms of Solvency I.

The Group CEO of Generali, Mario Greco, said: “The acquisition of the minority interest in Generali Deutschland Holding is consistent with our aim to have full control of all our strategic business units and is part of our plan to simplify the Group. This will be a value-accretive investment which will generate a return above the profitability target outlined in our strategic plan.”

With a premium income totaling €17.6 billion in 2012 and 13.5 million customers, Generali Deutschland is the second-largest insurance provider in Germany and the leading operator in direct channels. It offers a complete range of Life, Property&Casualty and Health products and services through a multi-channel distribution approach.

Generali has agreed to acquire a 3% stake in the company from a group of private investors at an initial price of €105 per share, resulting in a total consideration of €171 million, subject to a potential top up depending on the evaluation in the squeeze-out proceeding.

Pursuant to the applicable laws in case of squeeze-out, Generali will offer the minority shareholders a cash compensation per share calculated on the basis of the highest of the Generali Deutschland Holding weighted average market price over the last three months and the intrinsic value of the Generali Deutschland Holding shares as per the German valuation standard.

The squeeze-out is subject to the approval of Generali Deutschland Holding shareholders, who will meet in an extraordinary session which is expected to be held by the end of this year. Upon closing of the squeeze-out procedure, Generali Deutschland Holding will be delisted from the regulated market.

UBS Investment Bank acted as financial advisor for Generali in the transaction.

Assicurazioni Generali announces the launch of a placement of up to 15.5 million treasury shares, equal to approximately 1% of its share capital, currently held by Generali Group companies. The purpose of the transaction is to provide the liquidity for the squeeze-out and further optimize the capital structure of the Group.

The placement is addressed to eligible institutional investors with final terms to be determined through an accelerated bookbuilding process. Bookbuilding will commence immediately, although the right is reserved to close the books at any time. The Generali Group has further agreed to other market terms and conditions for the placement.

BNP Paribas, Morgan Stanley and UBS Investment Bank have been appointed by Generali to act as Joint Global Coordinators and Joint Bookrunners for the placement. Disclosure regarding the results of the placement will be made upon its completion.

This announcement is for informational purposes only and is not an offer to sell, or the solicitation of an offer to buy, any securities. The offer and sale of the securities referred to in this announcement has not been, nor will it be, registered under the United States Securities Act of 1933 and the securities may not be offered or sold in the United States absent such registration or an applicable exemption from registration. There will be no public offering of the securities in the United States in connection with this transaction, nor will there be any offer to the public of securities in Italy (nor has there been or will be any registration with Consob) since the accelerated bookbuilt offering is exclusively reserved to “Qualified Investors” (as defined in Consob Regulation n. 11971 of 14 May 1999, as subsequently amended). There shall be no sale of these securities in any State or jurisdiction in which such an offer or sale would be unlawful. No action has been or will be taken to permit a public offering of the securities in any jurisdiction, including Italy. In member states of the European Economic Area (“EEA”) which have implemented the Prospectus Directive (each, a “Relevant Member State”), this announcement and any offer if made subsequently is directed exclusively at persons who are “qualified investors” within the meaning of the Prospectus Directive. For these purposes, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in a Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU. Each of BNP Paribas, Morgan Stanley & Co. International plc and UBS Limited (“the “Managers”) is acting on behalf of Generali Group companies and no one else in connection with the placement and will not be responsible to any other person for providing the protections afforded to any of its clients or for providing advice in relation to the placement. None of the Managers will regard any other person as its client in relation to the placement.
Each of the Managers and any of their respective affiliates may participate in the placement for their own account on a proprietary basis.

(*) Total net profit as published in the Generali Deutschland Holding’s 2012 consolidated annual report.