NN Group and Delta Lloyd agree on recommended transaction
(Thomson Reuters ONE) -
Joint Press release
This is a joint press release by NN Group N.V. ('NN Group') and Delta Lloyd N.V.
('Delta Lloyd'), pursuant to the provisions of Section 4 Paragraph 3, Section 5
Paragraph 1 and Section 7 Paragraph 4 of the Decree on Public Takeover Bids
(Besluit Openbare Biedingen Wft) (the 'Decree') in connection with the intended
public offer by NN Group for all the issued and outstanding ordinary shares in
the capital of Delta Lloyd. This announcement does not constitute an offer, or
any solicitation of any offer, to buy or subscribe for any securities. Any offer
will be made only by means of an offer memorandum. This announcement is not for
release, publication or distribution, in whole or in part, in or into, directly
or indirectly, the United States, Canada or Japan or in any other jurisdiction
in which such release, publication or distribution would be unlawful.
To form a leading insurance and asset management company in the Netherlands
* NN Group and Delta Lloyd reached a conditional agreement on a recommended
all-cash public offer of EUR 5.40 (cum dividend) per issued and outstanding
ordinary share of Delta Lloyd representing a total consideration of EUR 2.5
billion
* Transaction supported and recommended by Delta Lloyd's Executive Board and
Supervisory Board
* Offer price represents a premium of 55% over the 3-months average closing
price prior to the initial announcement on 5 October 2016, delivering
immediate and certain value to Delta Lloyd shareholders
* Creation of a well-diversified leader in the Dutch pensions, life and non-
life insurance and banking sectors, with a strong asset management platform,
attractive international presence, ample growth opportunities and appealing
customer propositions
* NN Group anticipates a return on investment of around 10% and a double digit
accretion in dividend per share (DPS) for 2018 and onwards
* Robust combined balance sheet and solid 3Q16 pro-forma Solvency II ratio of
approximately 189%
* NN Group has committed financing in place and will fund the transaction via
a combination of existing cash resources and debt
* Draft offer memorandum will be submitted to AFM no later than 28 December
2016
NN Group and Delta Lloyd announce today that a conditional agreement (the
'Merger Protocol') has been reached on a recommended public offer (the 'Offer')
to be made by NN Group for the entire issued and outstanding ordinary share
capital of Delta Lloyd (the 'Shares') for EUR 5.40 in cash per ordinary Delta
Lloyd share (cum dividend) (the 'Offer Price').
This announcement follows constructive interactions between the boards and
management teams of both companies including a period of targeted due diligence.
Lard Friese, CEO of NN Group: 'Today's announcement is a significant step in our
journey to build a sustainable, profitable business for the future, and to
strengthen our leading position in the Netherlands and Belgium. I value the
entrepreneurial spirit, customer focus, the commercial agility, and strong
distribution capabilities of Delta Lloyd. Customers of both companies will
benefit from an enhanced proposition by complementing our product offering and
distribution. Consolidation in the insurance sector will bring additional
stability in our markets, and will generate a materially higher cash return to
our shareholders over time, through the benefits of scale. We strongly believe
this transaction to be in the best interest of both companies' stakeholders, and
I am pleased the transaction has the support and recommendation of the Delta
Lloyd Boards. '
Hans van der Noordaa, CEO of Delta Lloyd: 'Delta Lloyd is a highly client
focused organisation with excellent market positions. I am proud of how the
management and employees of Delta Lloyd have worked together over the last years
to improve the operations and capital of the Group. We have been making good
progress towards our goals. But our Boards have recognised the risks to the
achievement of those goals which exist particularly in respect of the ongoing
evolution of Solvency II capital requirements and a competitive market, that is
on the verge of consolidation. After extensive analysis of different
alternatives, we made a clear decision that a combination of NN Group and Delta
Lloyd is in the long term interest of our stakeholders including our
shareholders. The offer provides a certain cash premium for shareholders and
also a secure future for policyholders.'
Strategic rationale
NN Group and Delta Lloyd believe that a combination of Delta Lloyd and the Dutch
and Belgian activities of NN Group (the 'Combined Company') is compelling. The
transaction will result in an overall stronger platform within the Benelux from
which to provide enhanced customer propositions and generate shareholder return:
* Additional scale and capabilities will result in an improved customer
proposition within the Dutch pension market;
* Doubling the size of the non-life insurance business will drive underwriting
results and customer experience;
* The integration of two leading asset management businesses creates
additional scale and expertise;
* Increased size and scale of the banking business, thereby improving the
competitive offering to existing and new customers;
* Doubling the presence in Belgium, leading to a strong life insurance market
share with a more diversified offering through additional channels.
The Combined Company will be better placed to capture opportunities that
technological innovation brings and will provide increased possibilities for
knowledge sharing, strengthening capabilities and talent development. It will
bring a perspective of growth and lead to opportunities for employees of both
companies and will facilitate continuous improvement in customer service and
experience.
Transaction details
The Offer envisions the acquisition of Shares pursuant to a recommended public
offer by NN Group.
The Offer Price represents:
* a premium of approximately 31% over the closing price of EUR 4.12 per Share
on 4 October 2016, the last trading day before NN Group initially announced
its intention to make an offer for Delta Lloyd;
* a premium of approximately 38% relative to the average closing price per
Share during the last month prior to the initial announcement; and
* a premium of approximately 55% relative to the average closing price per
Share of Delta Lloyd during the last three months prior to the initial
announcement.
Financing
The Offer values 100% of the Shares at EUR 2.5 billion. NN Group will be able to
pay the Offer consideration for an amount of EUR 1.4 billion with cash from its
own available resources. For the remainder, NN Group has, subject to customary
conditions, committed debt financing made available to it from reputable global
financial institutions. The financial leverage ratio and fixed cost coverage
ratios of the Combined Company are estimated in a range of 30% and 9x on a pro-
forma basis at 30 September 2016.
Synergies and cash generation
The combination of Delta Lloyd and the Dutch and Belgian activities of NN Group
will facilitate a drive for further efficiency, supporting the Combined
Company's cash generation capacity. NN Group will provide additional information
on potential cost and capital synergies in due course, but is currently
anticipating cost synergies of approximately EUR 150 million pre-tax by 2020.
This is anticipated to occur in a range of areas including:
* Integration of operational and supporting activities in Life and Non-Life,
including commercial migration
* Full integration of Bank & Asset Management
* Removal of overlap in centralised functions
* Reduction in project spend
With respect to capital, NN Group estimates the 3Q16 pro-forma Solvency II ratio
of the combination to be at 189%, taking into account the reversal of the EUR
333 million deduction of the share buy-back and assuming the base case of senior
debt issuance. Based on its due diligence, NN Group believes that there will be
some initial capital synergies from the combination but also expects meaningful
negative impacts from the alignment of actuarial assumptions under NN Group
ownership. The combination of these is anticipated to result in the 3Q16 pro-
forma Solvency II ratio declining from 189% to approximately 185%.
Over time, NN Group sees potential for further capital synergies, the transition
of Delta Lloyd's legal entities onto the NN Group Partial Internal Model, but
also the removal of the longevity hedge benefit currently included in Delta
Lloyd's standard formula approach.
NN Group anticipates the transaction to generate a return on investment of
around 10% and a double digit accretion in DPS for 2018 and onwards. The
Combined Company will remain focussed on generating capital within its operating
units and remitting this capital to the holding company where it will be subject
to NN Group's unchanged dividend policy.
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Press enquiries NN Group Investor enquiries NN Group
Media Relations Investor Relations
+31 70 513 1918 +31 88 663 5464
mediarelations(at)nn-group.com investor.relations(at)nn-group.com
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Press enquiries Delta Lloyd Investor enquiries Delta Lloyd
Media Relations Investor Relations
+31 20 594 4488 +31 20 594 9693
mediarelations(at)deltalloyd.nl ir(at)deltalloyd.nl
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Wires call
Lard Friese, Hans van der Noordaa, Delfin Rueda and Clifford Abrahams will host
a wires conference call at 7.30 CET on 23 December 2016. Journalists can join
the conference call at +31 20 531 5851 (NL).
Investor call
Lard Friese, Hans van der Noordaa, Delfin Rueda and Clifford Abrahams will host
an analyst and investor conference call at 9.15 CET on 23 December 2016. Members
of the investment community can join the conference call at
+31 20 531 5851(NL), +44 20 3365 3210 (UK), +1 866 349 6093 (US) or follow the
webcast on www.nn-group.com.
Press conference and webcast
Lard Friese and Hans van der Noordaa will host a Press conference at 11.00 CET
on 23 December 2016. Journalists join the conference at NN Group Headquarters,
Prinses Beatrixlaan 35, The Hague or follow the webcast on www.nn-group.com.
Please confirm your attendance via mediarelations(at)nn-group.com or
+31 70 513 1918.
General restrictions
This announcement is for information purposes only and does not constitute an
offer or an invitation to acquire or dispose of any securities or investment
advice or an inducement to enter into investment activity. This announcement
does not constitute an offer to sell or issue or the solicitation of an offer to
buy or acquire the securities of Delta Lloyd or NN Group in any jurisdiction.
The distribution of this press release may, in some countries, be restricted by
law or regulation. Accordingly, persons who come into possession of this
document should inform themselves of and observe these restrictions. To the
fullest extent permitted by applicable law, NN Group disclaims any
responsibility or liability for the violation of any such restrictions by any
person. Any failure to comply with these restrictions may constitute a violation
of the securities laws of that jurisdiction. Neither NN Group, nor any of its
advisors assumes any responsibility for any violation by any person of any of
these restrictions. Any shareholder who is in any doubt as to its position
should consult an appropriate professional advisor without delay. This
announcement is not to be published or distributed in or to the United States,
Canada or Japan.
Important legal information
All figures in this document are unaudited. Small differences are possible in
the tables due to rounding. Certain of the statements contained herein are not
historical facts, including, without limitation, certain statements made of
future expectations and other forward-looking statements that are based on
management's current views and assumptions and involve known and unknown risks
and uncertainties that could cause actual results, performance or events to
differ materially from those expressed or implied in such statements. Actual
results, performance or events may differ materially from those in such
statements due to, without limitation: (1) changes in general economic
conditions, in particular economic conditions in NN Group's and Delta Lloyd's
core markets, (2) changes in performance of financial markets, including
developing markets, (3) consequences of a potential (partial) break-up of the
euro, (4) changes in the availability of, and costs associated with, sources of
liquidity as well as conditions in the credit markets generally, (5) the
frequency and severity of insured loss events, (6) changes affecting mortality
and morbidity levels and trends, (7) changes affecting persistency levels, (8)
changes affecting interest rate levels, (9) changes affecting currency exchange
rates, (10) changes in investor, customer and policyholder behaviour, (11)
changes in general competitive factors, (12) changes in laws and regulations,
(13) changes in the policies of governments and/or regulatory authorities, (14)
conclusions with regard to accounting assumptions and methodologies, (15)
changes in ownership that could affect the future availability to us of net
operating loss, net capital and built-in loss carry forwards, (16) changes in
credit and financial strength ratings, (17) NN Group's ability to achieve
projected operational synergies and (18) the other risks and uncertainties
detailed in the Risk Factors section contained in recent public disclosures made
by NN Group or Delta Lloyd.
Any forward-looking statements made by or on behalf of NN Group or Delta Lloyd
speak only as of the date they are made, and, NN Group or Delta Lloyd assume no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information or for any other reason.
This document does not constitute an offer to sell, or a solicitation of an
offer to buy, any securities in the United States or any other jurisdiction.
Read the full press release:
http://hugin.info/142905/R/2067609/776350.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Delta Lloyd via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 23.12.2016 - 07:00 Uhr
Sprache: Deutsch
News-ID 514653
Anzahl Zeichen: 16377
contact information:
Town:
Amsterdam
Kategorie:
Business News
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"NN Group and Delta Lloyd agree on recommended transaction"
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