The Greek insurance market is undergoing a realignment following Allianz’ acquisition of European Reliance to form the largest general insurance company in the country.
Based on turnover data for 2020, European Reliance was ranked 3rd in turnover with net earned premiums amounting to €132,399,000, while Allianz was 8th with €75,923,000; their combined total exceeds €208m, when 1st-ranked Ergo Insurance had a turnover of €164,384,000 in 2020.
In the life insurance sector, European Reliance was ranked 8th in 2020, with a turnover of €72,430,000 (including policy fees), while Allianz was 11th with €40,700,000.
As to the timeline of the agreement, Allianz submitted a public offer to buy out all of European Reliance’s stock on 11 February, having already reached an agreement with 30 shareholders and having acquired 72.27% of the share capital. Amongst those were the Georgakopoulos family, which held a 27.04% stake, and the European Bank for Reconstruction and Development, which held a 15.54% stake.
It is noted that Allianz agreed to pay shareholders €7.80 per share, a satisfactory amount, given that the weighted average stock price over the last six months was €5.16 per share, and the price resulting from valuation was €6.31. As such, the price to be paid for 72.27% of shares comes to €207m.
According to the announcement by European Reliance, the name will be retained after the buyout and Christos Georgakopoulos will remain as CEO, ensuring the continuity of the company’s business strategy and operations.
The Allianz announcement
Late Friday night, 11 February, Allianz issued the following press release:
“Allianz SE today announced it is entering into certain Share Purchase Agreements (SPAs) to acquire 72% of European Reliance General Insurance Company SA (“European Reliance”), a leading Greek insurer with €223m in gross written premiums (GWP), a network of 110 retail offices and 5,667 agents.
The transaction is the continuation of the Allianz Group’s stated strategy to grow its franchise by leveraging its scale and expertise.
Allianz will pay €7.80 per share or approximately €207m to acquire all the outstanding shares of European Reliance via the SPAs and a combined Voluntary Tender Offer (VTO).
Following the approval by the Bank of Greece, the Hellenic Competition Commission and the Hellenic Capital Market Commission, Allianz intends to publish the approved Information Circular.”
The European Reliance announcement
On Friday evening, 11 February, the European Reliance Board of Directors issued the following announcement, stressing, among other things, that the company name will be retained after the acquisition and Christos Georgakopoulos will remain in his position as CEO.
“Today, 11-2-2022, the Board of Directors of the societé anonyme under the name ‘EUROPEAN RELIANCE GENERAL INSURANCE COMPANY S.A.’ (hereinafter the Company) announces to the investors in accordance with the provisions of Art. 17 para. 1 of Regulation (EU) No 596/2014 dated 16 April 2014, Article 4.1.3.1. indent 5 of the Athens Exchange Rulebook, as well as any other relevant applicable provision, that during its meeting on 11-2-2022 at 18:30, the Board of Directors was informed that the company named ‘Allianz SE’, having its registered seat at Königinstraße 28, 80802 Munich, Federal Republic of Germany (hereinafter the Offeror) has submitted a voluntary tender offer in accordance with the provisions of Law 3461/2006, as currently in force, (hereinafter the Tender Offer) for the acquisition of the total shares of the Company for a consideration of €7.80 per share. The acquisition of the shares by the Offeror is subject to approvals required by the competent regulatory authorities, the Bank of Greece, the Hellenic Capital Market Commission and the Hellenic Competition Commission.
Today, the Offeror executed share purchase agreements with the Company’s shareholders for the acquisition of 19,181,256 shares before the end of the Tender Offer Acceptance Period, which represent in total 72.2% of the shares and voting rights in the Company, subject to approvals required by the competent regulatory authorities, the Bank of Greece, the Hellenic Capital Market Commission and the Hellenic Competition Commission (hereinafter the Transaction). In particular the Offeror has executed share purchase agreements with the following:
1) shareholders of the Company, including the Company’s executives and the CEO, for the acquisition of 5,313,400 shares representing 20.02% of shares and voting rights in the Company;
2) EBRD, for the acquisition of 4,125,552 shares representing 15.54% of shares and voting rights in the Company; and
3) other shareholders, for the acquisition of 9,742,304 shares representing 36.7% of shares and voting rights in the Company.
The long-term plans of the Offeror include the integration of the Company’s activities with those of the Allianz Group’s subsidiary in Greece with Christos Georgakopoulos as CEO, the promotion of the Company’s brands and the strengthening of the Allianz Group’s role in the Greek insurance market.
The proposed participation of the Offeror in the Company’s share capital and the fact that Mr Georgakopoulos shall remain in the Company’s management will ensure the continuation of the Company’s business strategy and operation under the same successful business principles, but will also result in achieving additional benefits which will arise from the Company’s participation in a global group operating in the same sector, thus contributing to the further strengthening of the Company’s position in the market.
Alphacap is acting as financial advisor and law firm Zepos & Yannopoulos as legal advisor in relation to the Transaction.”
