Swiss Life Holding and SNS REAAL, a leading provider of innovative financial services in the Netherlands, have come to a mutual understanding concerning the intended sale of Swiss Life’s Dutch and Belgian businesses, including Zwitserleven, Swiss Life Asset Management (Nederland) and Swiss Life (Belgium) for a total consideration of up to EUR 1535 million (CHF 2510 million), consisting of an initial purchase price of EUR 1445 million and a price adjustment of up to EUR 90 million based on the increase of the local net asset values of Zwitserleven and Swiss Life (Belgium) during 2007. The maximum total consideration is equivalent to 1.1x the traditional embedded value of the businesses as at 30 June 2007.
Following an extensive strategic review, Swiss Life has decided to sell the Dutch and Belgian businesses. Swiss Life believes it would not have been possible for it to achieve a sustainable profitable market position on a standalone basis, neither in the Netherlands nor in Belgium, given the limited scope for consolidation opportunities and the increasing importance of critical mass to deliver growth and sustain margins.
In the words of Rolf Dörig, Chief Executive Officer of the Swiss Life Group: "We are convinced that the intended sale of our Dutch and Belgian operations to SNS REAAL is the best way to maximise value creation for our shareholders and that the proposed solution provides new and attractive opportunities for the management and employees of these businesses. Zwitserleven has developed into the preferred partner for autonomous pension funds, and its brand remains outstanding. Our Belgian operation has made considerable progress over the last two years, and is now positioned to further benefit from the growing need for pension solutions. The terms of the transaction clearly reflect the quality of the franchises in both markets.”
In 2006, Swiss Life’s Dutch and Belgian insurance businesses contributed 12% to the Group’s gross written premiums, policy fees and deposits received and 13% to the insurance segment result. The traditional embedded value of the businesses on 30 June 2007 amounted to CHF 2.4 billion (EUR 1.4 billion) of the Group’s total of CHF 12.5 billion.
The transaction is expected to be completed by the end of the first half of 2008. The Dutch and Belgian operations consequently will be fully consolidated in the Swiss Life Group’s financial statements for 2007 and will be treated as discontinued operations. The sale is expected to result in an overall contribution of around CHF 1.2 billion to the Swiss Life Group’s post-tax profit, of which approximately CHF 200 million will be accounted for in 2007 and around CHF 1.0 billion in 2008.
As mentioned above, the final consideration is subject to adjustments for the change in the statutory net asset values of the businesses during 2007. From 1 January 2008, the economic benefits and burdens of the businesses shall be for the account and risk of the purchaser.
As part of the transaction, it is the intention that SNS REAAL will become the partner of the Swiss Life Network in the Netherlands and Belgium.
The transaction is subject to regulatory approval and will be referred to the relevant works councils.
Swiss Life will use the proceeds from this transaction and from the recently announced sale of Banca del Gottardo to finance future growth and to launch a share buy-back programme of up to CHF 2.5 billion over the next 18 months. Swiss Life will announce more details at its Investors’ Day on 4 December 2007.
Goldman Sachs International acted as exclusive financial adviser to Swiss Life on this transaction.
Attachment
- Key figures of the Dutch and Belgian insurance businesses for 2006 and for the first half of 2007
- Media release SNS REAAL
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The Swiss Life Group is one of Europe’s leading providers of pension and life insurance products. The Swiss Life Group offers individuals and companies comprehensive advice across a broad range of products via agents, brokers and banks in its domestic market, Switzerland, where it is market leader, and selected European markets. Multinational companies are serviced with tailor-made solutions by a network of partners in over 60 countries and regions. With Banca del Gottardo, the Swiss Life Group is also a provider of private banking services. The bank, with its head office in Lugano, has an extended national and international network and around CHF 36 billion in customer assets under management.
Swiss Life Holding, registered in Zurich, dates back to the Schweizerische Rentenanstalt founded in 1857. Shares of Swiss Life Holding are listed on the SWX Swiss Exchange (SLHN). The Swiss Life Group employs a staff of around 9000.
This publication contains specific forward-looking statements, e.g. statements including terms like “believe”, “assume”, “expect” or similar expressions. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actual results, financial situation, development or performance of the company and those explicitly or implicitly presumed in these statements. Against the background of these uncertainties, readers should not place undue reliance on forward-looking statements. The company assumes no responsibility to update forward-looking statements or to adapt them to future events or developments.