Helvetia (HELN) M&A Announcement summary

Deal rationale and strategic fit

• Merger creates the second largest insurance group in Switzerland with a ~20% market share and a top-10 position in Europe, leveraging complementary strengths, geographic diversification, and a combined workforce of over 22,000 employees across 8 countries.

• Both companies share similar business models, values, and visions, facilitating smooth integration and maximizing value creation.

• The merger leverages complementary assets, geographies, and business lines, enhancing diversification and scale.

• The combined group will benefit from economies of scale, enhanced technical excellence, and a broader product and distribution network.

• The merger aims to unlock further potential in the Swiss client base and expand specialty and insurebanking offerings.

Financial terms and conditions

• Structured as a merger of equals with Baloise merging into Helvetia; fixed exchange ratio of 1.0119 new Helvetia shares for each Baloise share, resulting in near 50/50 ownership and 100% stock consideration.

• Company to be named Helvetia Baloise Holding Ltd, headquartered in Basel and listed as "HBAN".

• Board split evenly (7 Helvetia, 7 Baloise); CEO from Helvetia, Deputy CEO/Head of Integration from Baloise.

• Both companies to pay ordinary dividends for FY2024, subject to shareholder approval; Baloise share buyback cancelled if merger approved.

• Pro forma 2024 business volume: CHF 20.2 billion; net income: CHF 867 million; combined ratio: 94%.

Synergies and expected cost savings

• Run-rate cost synergies estimated at CHF 350 million pre-tax, with about 80% realized by 2028; two-thirds from FTE reductions, one-third from non-FTE costs.

• Integration costs expected at CHF 500–600 million, mainly incurred by end of 2028.

• Cash run rate synergies after tax and policyholder participation estimated at CHF 220 million.

• Additional upside from capital and revenue synergies anticipated over time.

• Dividend capacity uplift of ~20% expected by 2029.