Unipol Approves EU1.1 Billion Rights Offer in Merger Plan
January 30, 2012, 5:29 AM ESTBy Sonia Sirletti
Jan. 30 (Bloomberg) -- Unipol Gruppo Finanziario SpA, Italy’s third-biggest insurer, plans to raise as much as 1.1 billion euros ($1.45 billion) by selling new shares as it seeks to merge with rivals to become the No. 2.
Unipol agreed to buy new shares in Premafin Finanziaria SpA, the controlling investor in the country’s second-biggest insurer, Fondiaria-SAI SpA, the Bologna, Italy-based company said in a stock-exchange statement yesterday. Unipol will buy the shares in Premafin through a capital increase reserved to it for as much as 400 million euros.
Unipol signed a letter of intent on Jan. 13 to take control of Premafin and merge with unprofitable Fondiaria and its unit Milano Assicurazioni SpA. Under the plan approved yesterday, Unipol will finance Premafin through the capital increase so it can participate in Fondiaria’s share sale.
“There are some potential benefits to the industrial integration of the groups given the significant opportunities to extract cost synergies and benefit from economies of scale,” Alberto Villa, an analyst at Intermonte SIM SpA, wrote in a Jan. 19 report.
The merger among the four companies will help Fondiaria to boost capital after the Florence-based insurer said Sept. 23 that it expects to report a net loss in 2011 of about 925 million euros. The company’s solvency ratio is about 90 percent, below the European regulator’s minimum requirement of 100 percent.
The transaction is conditional on approval by the Italian insurance regulator Isvap, stock market watchdog Consob and the antitrust agency.
--Editors: Ben Livesey, John Simpson
To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net
To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net
