Cevian Sells Helvetia Stake to Pave Way For Baloise Merger
(Bloomberg) — Helvetia Holding AG’s biggest shareholder has bought Cevian’s 9.4% stake in Baloise Holding AG, paving the way for the merger of the two Swiss insurers.
Patria Genossenschaft acquired 4,282,758 Baloise shares from activist investor Cevian on Friday, according to a statement. Helvetia agreed to combine earlier this week with rival Baloise to create the second-biggest insurance company in Switzerland with a combined market value of more than 18 billion Swiss francs ($22 billion). It would be one of the biggest deals in European finance so far this year.
Patria, a cooperative, is Helvetia’s biggest shareholder with a 34% stake and supports the combination. The purchase of the additional Cevian stake gives Patria even more say in the approval of the merger at shareholder meetings next month.
The purchase price for the block of shares wasn’t disclosed. Cevian’s Robert Schuchna won’t stand for election to the board of directors of Baloise, the statement also said.
Cevian had been pushing Baloise to focus on its core Swiss business and sell other assets, Bloomberg News had reported. Those efforts have been falling flat. Cevian is also an investor in UBS Group AG.
The activist investor’s agitation had prompted European insurers to study whether they would want to bid for Baloise or parts of its business if they come up for sale, people familiar with the matter said in November.
The deal terms of Helvetia Baloise imply that the combined group will be 53% owned by Helvetia shareholders and 47% owned by Baloise investors in what the insurers dubbed a “merger of equals,” according to announcements made earlier this week.
The merged entity will have its headquarters in Basel, the city Baloise is named after. Helvetia Chief Executive Officer Fabian Rupprecht will be CEO, while Baloise Chairman Thomas von Planta is set to have the same position in the merged group.
Helvetia’s combination with Baloise will result in 350 million Swiss francs of annual cost savings before policyholder participation, the insurers said in the statement. 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.
(Updates with details on the deal and Cevian)
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