Business combinations

Transcription

1 186 Consolidated financial statements Notes General information Accounting principles and policies Segment reporting Consolidation, business combinations Assets and disposal groups Business combinations Business combinations during the first quarter of 2012 Metropolitana Compañía de Seguros By way of an agreement dated 24 June 2011, Talanx International AG and HDI Seguros Mexico (both Retail International segment) acquired all of the shares of the Mexican insurance company Metropolitana Compañía de Seguros for the purchase price of USD 100 million (equivalent to EUR 77 million), which was paid in cash. The acquired shares correspond to the voting rights. Closing took place on 1 January The Mexican company primarily transacts motor business. Business is also conducted in the life and property lines. Premium volume amounted to EUR 75 million in The sales organisation concentrates on Mexico City and the centre of the country. The purpose of this is to move forward with further internationalisation in the Retail International segment. The Group has enhanced its presence in Latin America through the and is thus able to make the most of the available opportunities in local markets. Goodwill from the amounts to EUR 43 million and reflects the growth expected mainly in the motor business, as well as considerable synergistic and cross-selling effects. Goodwill is not taxdeductible. Acquisition-related costs (EUR 0.5 million) are contained under Other income and expenses. Intangible assets 5 Investments 77 Reinsurance recoverables on technical provisions 2 Accounts receivable on insurance business 34 Cash and cash equivalents 5 Deferred tax assets 9 Other assets 16 Total assets 148 Technical provisions 84 Other provisions 12 Funds withheld under reinsurance treaties 2 Other liabilities 6 Deferred tax liabilities 10 Total liabilities 114 Acquired net assets 34 The assets include intangible and tangible assets of EUR 17 million. The amount recognised for accounts receivable corresponds to fair value. No further payment defaults are anticipated. Moreover, pursuant to IFRS 3.23, contingent liabilities of EUR 2 million were recognised, which are primarily attributable to contingent tax liabilities. The obligation depends on a pending decision by the local authorities, which is expected in the short to medium term. An indemnification claim exists for these contingent liabilities, for which a corresponding indemnification asset of the same amount was recognised. In addition, contingent liabilities of approximately EUR 1.7 million were identified, recognition of which was omitted due to lack of reliable measurement of fair value. There were no significant changes in this respect as at 31 December Other conditional payments, indemnification assets and separate transactions as defined by IFRS 3 were not recognised.

2 Nature of risks balance sheet assets balance sheet liabilities statement of income Other information List of shareholdings 187 There have been no significant changes to contingent liabilities as at the balance sheet date. Premium volume ( Net premium earned ) amounted to EUR 68 million as at 31 December The profit generated by the company stood at EUR 8 million as at 31 December Business combinations during the second quarter of 2012 Europa insurance group (TU Europa) In its press statement of 14 December 2011, Talanx International AG (TINT) announced that it was launching a long-term strategic bancassurance partnership in Poland jointly with our Japanese strategic partner, Meiji Yasuda Life Insurance Company, and the Polish Getin Holding Group (Getin). To this end TINT and Meiji Yasuda Life Insurance Company, together with Getin, acquired the Europa insurance group (TU Europa Group). In connection with this transaction, on 1 June 2012 (the closing date) TINT acquired 50% plus one share of the parent company of TU Europa Non-Life (Towarzystwo Ubezpieczeń Europa S. A.) at a price of PLZ 912 million (equivalent to EUR 211 million). The acquired shares correspond to the voting rights. The purchase price was paid in cash. TU Europa Non-Life holds participating interests in the Poland-based enterprises TU Europa Life (Towarzystwo Ubezpieczeń na Życie Europa S. A.) (100%) and Open Life (Open Life Towarzystwo Ubezpieczeń Życie S. A.) (51%). The group also includes the Ukraine-based insurance companies Europa UA Non- Life ( Towarzystwo Ubezpieczeń Europa.UA) (90%) and Europa UA Life (Towarzystwo Ubezpieczeń Europa.UA Życie) (92%). The ownership interests have been calculated by adding all directly and indirectly held interests. In addition, a public tender offer was made to all shareholders of the TU Europa Group, which is publicly traded on the Warsaw stock exchange. For further details, please see our explanatory remarks in the Other information section, Contingent liabilities and other financial commitments subsection. The purpose of this is to move forward with further internationalisation in the Retail International segment. Moreover, the Group has enhanced its presence in Central and Eastern Europe and is thus able to make the most of the available opportunities in local markets. The Polish companies within the TU Europa Group focus on three business areas: life insurance (providing cover for mortgage loans), property and casualty insurance (providing cover for consumer loans) and investment products (fund-linked policies as savings products). The insurance group is by its own account one of the leading Polish providers of insurance via the banking channel. We believe it to be an innovative and profitable market participant with a strong, entrepreneurial management team. Goodwill from the amounted to EUR 134 million and primarily reflects the expected profitable growth in the Polish market, particularly in the bancassurance segment. Goodwill is not tax deductible. In connection with a written put option as part of the, TINT undertook in principle to acquire interests in the TU Europa Group that are held by Getin, in exchange for financial assets. In this regard, TINT recognised a financial obligation in the amount of the present value of the repurchase price of these interests (EUR 42 million), which is to be measured and recognised in subsequent periods through profit and loss in compliance with IAS 39. The Group booked the obligation against the minority interest in shareholders equity (the anticipated method ). The of a total of 66.54% plus one share was therefore recorded, and as a result, goodwill was also shown at this (higher) proportion. Minority interests amounting to EUR 105 million were valued at the pro-rata fair value of the identified net assets and pro-rata recognition of goodwill, less the obligation under the put option. The transaction costs for the amounted to EUR 3 million, and were included under Other income and expenses.

3 188 Consolidated financial statements Notes General information Accounting principles and policies Segment reporting Consolidation, business combinations Assets and disposal groups Intangible assets 201 Investments 1,233 Investments for the account and risk of holders of life insurance policies 28 Reinsurance recoverables on technical provisions 4 Accounts receivable on insurance business 38 Cash and cash equivalents 80 Deferred tax assets 15 Other assets 7 Total assets 1,606 Technical provisions 164 Technical provisions in the area of life insurance insofar as the investment risk is borne by policyholders 28 Other provisions 6 Other liabilities (mainly from investment contracts) 1,177 Deferred tax liabilities 7 Total liabilities 1,382 Acquired net assets (including non-controlling interests of EUR 6 million) 224 The assets include intangible and tangible assets of EUR 203 million. The acquired intangible assets consist primarily of insurance-related intangible assets (= PVFP), sales networks and customer relationships. The amount recognised for accounts receivable corresponds to fair value. No further payment defaults are anticipated. No contingent liabilities pursuant to IFRS 3.23 were identified. Other conditional payments, indemnification assets and separate transactions as defined by IFRS 3 were not recognised. In the period from 1 June 2012 to 31 December 2012, premium volume ( Net premium earned ) amounted to EUR 174 million. In the event of on 1 January 2012, it would have amounted to EUR 249 million (calculation simplified on the basis of local IFRS data for January to May 2012). As at 31 December 2012, the result generated by the company amounted to EUR 13 million. In the event of on 1 January 2012, it would have amounted to EUR 26 million (calculation simplified on the basis of local IFRS data for January to May 2012). Business combinations during the third quarter of 2012 insurance group WARTA Effective 1 July 2012, Talanx International AG (TINT) acquired 100% in WARTA non-life (Towarzystwo Ubezpieczeń i Reasekuracji WARTA S. A., WARTA), Warsaw, Poland, from the Belgian KBC group. Effective 3 July 2012, Talanx s Japanese partner, Meiji Yasuda Life Insurance Company, acquired 30% of the shares of WARTA from TINT, which had held them in trust since the. As at the closing date (1 July 2012), and on the basis of the agreements made, the Group has acquired only 70% of the shares in WARTA. The other 30% are reported as non-controlling interests. These shares correspond to the voting rights. The total purchase price for the WARTA Group, as adjusted, amounted to EUR 842 million, of which EUR 602 million is attributable to TINT, and was paid in cash.

4 Nature of risks balance sheet assets balance sheet liabilities statement of income Other information List of shareholdings 189 WARTA non-life holds interests in the following subsidiaries: WARTA life (Towarzystwo Ubezpieczeń na Życie WARTA S. A.) (100%), ALFA Fund (KBC ALFA Specjalistyczny Fundusz Inwestycyjny Otwarty) (100%) which exclusively holds investments of TUiR WARTA S. A. WARTA Real Estate (WARTA Nieruchomości Sp. z o.o. w likwidacji) (100%), WARTA 24 (WARTA 24 plus Sp. z o.o. w likwidacji) (100%), WARTA Finance (WARTA Finance S. A. w likwidacji) (100%) and Gdynia Shipping (Gdynia America Shipping Lines (London) Limited) (73.68%). WARTA Real Estate, WARTA 24 and WARTA Finance are in liquidation. From the Group s perspective, these enterprises and Gdynia Shipping are insignificant in terms of the Group s assets, financial position and net income and were therefore not included in the scope of consolidation on initial consolidation. The purpose of this is to move forward with further expansion in the Retail International segment. The WARTA insurance group is a full-range insurance provider that has its own nationwide sales network for property and life business. The Talanx Group has enhanced its presence in Eastern Europe through the and is thus able to make the most of the available opportunities in the Polish market. Goodwill from the amounted to EUR 271 million and reflects the expected profitable growth, as well as considerable synergistic effects. Goodwill is not tax deductible. To date, the transaction costs for the have amounted to EUR 5 million, which were recognised under Other income and expenses. Intangible assets 148 Investments 1,277 Investments for the account and risk of holders of life insurance policies 226 Reinsurance recoverables on technical provisions 96 Accounts receivable on insurance business 167 Cash and cash equivalents 10 Deferred tax assets 4 Other assets 34 Total assets 1,962 Technical provisions 949 Technical provisions in the area of life insurance insofar as the investment risk is borne by policyholders 225 Other provisions 17 Other liabilities (mainly from investment contracts) 237 Deferred tax liabilities 61 Total liabilities 1,489 Acquired net assets 473 The assets include intangible and tangible assets of EUR 176 million. The acquired intangible assets consist primarily of insurance-related intangible assets (= PVFP), sales networks, customer relationships and brand names. Minority interests amounting to EUR 142 million were measured at the pro-rata fair value of the identified net assets.

5 190 Consolidated financial statements Notes General information Accounting principles and policies Segment reporting Consolidation, business combinations Assets and disposal groups The amount recognised for accounts receivable (EUR 167 million) corresponds to fair value. Accounts receivable include impairments totalling EUR 23 million. No further payment defaults are currently anticipated. Of the impairments, EUR 18 million is attributable to accounts receivable from policyholders (fair value of EUR 138 million, gross amount of EUR 156 million), EUR 2 million to accounts receivable from insurance intermediaries (fair value of EUR 14 million, gross amount of EUR 16 million) and EUR 1 million to accounts receivable from reinsurance business (fair value of EUR 15 million, gross amount of EUR 16 million). Other impairments essentially relate to other accounts receivable amounting to EUR 2 million. Pursuant to IFRS 3.23, contingent liabilities of EUR 3 million were recognised. There were no changes in this respect as of 31 December They were created for potential contingent tax liabilities. There is estimated to be a 40 to 50% likelihood of an outflow of resources. The obligation depends on decisions by local authorities expected in the short to medium term. There is no claim to indemnification. Other conditional payments, indemnification assets and separate transactions as defined by IFRS 3 were not recognised. In the period from 1 July to 31 December 2012, premium volume ( Net premium earned ) amounted to EUR 338 million. In the event of on 1 January 2012, it would have amounted to EUR 757 million (calculation simplified on the basis of data in accordance with local IFRS accounting policies for January to June 2012). As at 31 December 2012, the result generated by the companies amounted to EUR 26 million. In the event of on 1 January 2012, it would have amounted to EUR 76 million (calculation simplified on the basis of data in accordance with local IFRS accounting policies for January to June 2012). Business combination during the fourth quarter of 2012 AME Lux Effective 30 November 2012 ( date) our subsidiary companies HDI-Gerling Assurances S. A., Belgium (HG-A-BE) (takeover of 95% of the shares), and HDI-Gerling Verzekeringen N. V., Nether lands (HG/NL) (takeover of 5% of the shares), acquired property insurer Les Assurances Mutuelles d Europe Lux S. A. (AME Lux) in Luxembourg from Assurances Mutuelles d Europa S. A., Brussels, Belgium. Also effective 30 November 2012, HG/NL transferred its shares within the Group to HG-A-BE and HDI-Gerling Industrie Versicherung AG (HG-I). Therefore HG-A-BE holds 100% of the shares minus one share in AME Lux, which is now called HDI-Gerling Assurances S. A. Luxembourg; HG-I holds one share. All of the companies are allocated to the Industrial Lines segment. The acquired shares correspond to the voting rights. The acquired property insurer is predominantly active in the motor, liability and property segments in Luxembourg. After agreed adjustments, the purchase price amounted to EUR 6.8 million, and apart from the sum of EUR 0.6 million was paid in full in the reporting year. The remainder is due by 31 March 2013 and was recognised under Other liabilities. This is principally designed to safeguard expansion in the insurance business with midsized enterprises (SME/small and medium-sized enterprises market) in Luxembourg. Alongside the need for a local presence on the market for intermediaries and customers, this also gives access to local reinsurers. Goodwill from the amounted to EUR 0.5 million and primarily reflects the expected profitable growth in the Luxembourg market. The goodwill also reflects the expected synergistic effects as the same products will be sold for the SME market as are sold in Belgium by our local subsidiary. Goodwill is not tax deductible.

6 Nature of risks balance sheet assets balance sheet liabilities statement of income Other information List of shareholdings 191 The transaction costs for the amounted to EUR 30 thousand and were recognised under Other income and expenses. Investments 13 Reinsurance recoverables on technical provisions 2 Accounts receivable on insurance business 1 Deferred tax assets 1 Non-current assets classified as held for sale 5 Total assets 22 Technical provisions 13 Other provisions 1 Other liabilities 2 Total liabilities 16 Acquired net assets 6 The assets comprise real estate (EUR 5 million) which was intended to be sold prior to the and therefore was recognised in the opening balance sheet as held for sale in accordance with IFRS 5. This transaction was executed in December No contingent liabilities were identified, and the acquired intangible assets are not significant. The amount recognised for accounts receivable corresponds to fair value and only contains insignificant impairments (EUR 28 thousand). No further payment defaults are currently anticipated. In the period from 1 December 2012 to 31 December 2012, premium volume ( Net premium earned ) amounted to EUR 0.3 million. In the event of on 1 January 2012, it would have amounted to EUR 5 million. The profit of the company as of 31 December 2012 totalled EUR 0.3 million. In the event of on 1 January 2012 it would have amounted to EUR 0.8 million (assessment simplified using data according to local accounting standards from January to November 2012). Business combinations in the Non-Life Reinsurance segment In US subgroup Hannover Re Real Estate Holdings, Inc., where 95.1% of the shares are held, all of the shares in Nashville (Tennessee) West, LLC, Wilmington, 975 Carroll Square LLC, Washington D. C., and 1225 West Washington, LLC, Tempe, were acquired in 2012 for a total purchase price of EUR 168 million via subsidiary company GLL HRE Core Properties, LP, Wilmington. The business purpose of each of the companies is holding and managing a property. In connection with the, neither intangible assets nor goodwill were capitalised. No contingent liabilities, conditional payments or separate transactions as defined by IFRS 3 were identified.