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Germany’s Talanx Plans to Raise 700 Million Euros in IPO

Talanx AG, Germany’s third-biggest insurer, plans an initial public offering of shares for about 700 million euros ($882 million) in what would be Europe’s biggest IPO since February.

The insurer is scheduled to price the IPO by the end of September and will seek a listing in Frankfurt and Hanover, the location of its headquarters, according to terms for the sale obtained by Bloomberg. All stock being sold will be primary shares, according to the document.

“The market environment has improved and Talanx is very well prepared,” Chief Executive Officer Herbert Haas said in a statement on its website today. “If the conditions remain stable we plan to seek a stock exchange listing this autumn.”

Proceeds of the sale will be used to fund international expansion and strengthen the company’s capital base, the company said.

Talanx is owned by German mutual insurer HDI Haftpflichtverband der Deutschen Industrie VaG. It has been considering a share sale for more than a decade to finance international growth for its retail business and to expand industrial insurance. The company postponed a plan to sell shares earlier this year amid market volatility resulting from the European sovereign debt crisis.

As part of the IPO, Meiji Yasuda Life Insurance Co. will convert a 300 million-euro ($378 million) convertible bond it held since Nov. 2010 into Talanx shares at the offered price, the insurer said.

Growth

To speed up growth, Talanx acquired Poland’s Towarzystwo Ubezpieczen i Reasekuracji Warta SA earlier this year from KBC Group NV for 770 million euros, beating rivals in eastern Europe’s largest insurance market. When the purchase is completed in the second half of 2012, Meiji Yasuda will take over 30 percent of Warta, Poland’s second-largest insurer.

The insurer, which owns a 50.2 percent stake in Hannover Re, the world’s fourth-biggest reinsurer, said on Aug. 14 that second-quarter net income rose 4 percent to 143 million euros.

HDI, which is based in Hanover and owned by its insurance customers, has said it will keep a majority stake should Talanx sell shares to the public. Talanx’s IPO is being managed by Deutsche Bank AG (DBK), Citigroup Inc. (C) and JPMorgan Chase & Co. (JPM) as well as Rothschild, which acts as an adviser.

So far, the 110 biggest publicly listed companies in Germany included three insurance companies -- Allianz, Europe’s biggest insurer, Munich Re, the world’s biggest reinsurer, and Hannover Re. Talanx’s IPO would be the first big share sale by an insurer in Germany since Hannover Re ’s initial public offering in 1994.

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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