of GE Insurance Solutions
ZURICH, Switzerland, June 12 /PRNewswire/ -- On Friday, 9 June 2006, Swiss
Re completed the acquisition of GE Insurance Solutions. The acquisition
creates the world's largest and most diversified global reinsurer. GE
Insurance Solutions, which will be integrated into Swiss Re over the next 18
months, adds further momentum to Swiss Re's sustainable earnings growth.
"The acquisition of GE Insurance Solutions consolidates further Swiss Re's
global leadership position," says Swiss Re CEO Jacques Aigrain. "We will now
move swiftly to integrate GE Insurance Solutions, adding new talents to our
global workforce and building on the benefits of an enlarged client base and
expanded product offerings."
Financing of GE Insurance Solutions acquisition finalised
Swiss Re acquired GE Insurance Solutions for USD 6.8 billion plus closing
adjustments of USD 0.6 billion for a total of USD 7.4 billion. Between 18
November 2005 and closing, the book value of GE Insurance Solutions further
increased by USD 1.7 billion through cash capital contributions from General
Electric (GE) and earnings which Swiss Re reimbursed to GE on closing.
The closing of the acquisition concludes Swiss Re's cost efficient
financing package for the transaction, paid through cash, an at-market rights
issue, mandatory convertibles and hybrid debt. The financing included USD 2.4
billion equivalent in new Swiss Re shares at a share price of CHF 87.58 (USD
72.07) issued to General Electric (GE). GE now owns 8.9% of Swiss Re's share
capital. As a result of the issuance of new shares to GE, the number of Swiss
Re shares entitled to dividends increases by 33,300,957 shares to 358,212,933
In addition, Swiss Re issued mandatory convertible instruments (MCI) for
USD 500 million to GE. The MCI will automatically convert into Swiss Re shares
in three years.
Integrating GE Insurance Solutions
With the transaction now closed, Swiss Re commences integrating GE
Insurance Solutions, building on its talents, franchise and client base.
Functions and teams will be merged, leading to an overall reduction of office
locations as well as staff reductions in a number of locations. Through the
organisational streamlining Swiss Re expects to capture cost synergies of at
least USD 300 million per year, to be realised by the end of 2007. Overall the
acquisition will be accretive to earnings already in 2007.
Notes to editors
Swiss Re is the world's leading and most diversified global reinsurer. The
company operates through offices in over 30 countries. Founded in Zurich,
Switzerland, in 1863, Swiss Re offers financial services products that enable
risk-taking essential to enterprise and progress. The company's traditional
reinsurance products and related services for property and casualty, as well
as the life and health business are complemented by insurance-based corporate
finance solutions and supplementary services for comprehensive risk
management. Swiss Re is rated "AA" by Standard & Poor's, "Aa2" by Moody's and
"A+" by A.M. Best.
Cautionary note on forward-looking statements
Certain statements contained herein are forward-looking. These statements
provide current expectations of future events based on certain assumptions and
include any statement that does not directly relate to a historical fact or
current fact. Forward-looking statements typically are identified by words or
phrases such as "anticipate," "assume," "believe," "continue," "estimate,"
"expect," "foresee," "intend," "may increase" and "may fluctuate" and similar
expressions or by future or conditional verbs such as "will," "should,"
"would" and "could". These forward-looking statements involve known and
unknown risks, uncertainties and other factors, which may cause Swiss Re's
actual results, performance, achievements or prospects to be materially
different from any future results, performance, achievements or prospects
expressed or implied by such statements. Such factors include, among others:
* the impact of future investments, acquisitions or dispositions, and any
delays, unexpected costs or other issues experienced in connection with
any such transaction, including the ability to efficiently and
effectively integrate the GE Insurance Solutions operations into our
* cyclicality of the reinsurance industry;
* changes in general economic conditions, particularly in our core
* uncertainties in estimating reserves;
* the performance of financial markets;
* expected changes in our investment results as a result of the changed
composition of our investment assets or changes in our investment
* the frequency, severity and development of insured claim events;
* acts of terrorism and acts of war;
* mortality and morbidity experience;
* policy renewal and lapse rates;
* changes in rating agency policies or practices;
* the lowering or withdrawal of one or more of the financial strength or
credit ratings of one or more of our subsidiaries;
* changes in levels of interest rates;
* political risks in the countries in which we operate or in which we
* extraordinary events affecting our clients, such as bankruptcies and
* risks associated with implementing our business strategies;
* changes in currency exchange rates;
* changes in laws and regulations, including changes in accounting
standards and taxation requirements; and
* changes in competitive pressures.
These factors are not exhaustive. We operate in a continually changing
environment and new risks emerge continually. Readers are cautioned not to
place undue reliance on forward-looking statements. We undertake no obligation
to publicly revise or update any forward-looking statements, whether as a
result of new information, future events or otherwise.
SOURCE Swiss Re
Alayna Tagariello, +1-212-317-5663, firstname.lastname@example.org
-0- Jun/12/2006 13:21 GMT
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