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Media release
Group News
Mergers & acquisitions

Helvetia and Nationale Suisse to form a new Swiss insurance group

Helvetia and Nationale Suisse have agreed to come together to create a new Swiss insurance group. To this end, Helvetia is offering the shareholders of Nationale Suisse a public tender offer valued at CHF 80 per Nationale Suisse share. The Board of Directors of Nationale Suisse welcomes the Helvetia offer and recommends that the Nationale Suisse shareholders accept it. The combination of the two companies will mark the creation of a strong Swiss insurance group with outstanding prospects.
The combination of Helvetia and Nationale Suisse will mark the creation of a strong Swiss insurance group that will have a leading position in the domestic market, attractive positions in selected European markets and international growth potential with the Specialty Lines division. To this end, Helvetia Holding AG (Helvetia) is submitting a public tender offer to the shareholders of Nationale Suisse.

Erich Walser, Chairman of the Board of Directors of the Helvetia Group commented: «Helvetia and Nationale Suisse will be forming a unique insurance group with strong foundations and good prospects for success. By joining forces, we are providing both shareholders and customers alike with a significant upside potential. For the employees, a healthy company with a strong domestic market and international orientation is an attractive employer. Strong capitalisation and stable shareholders base will afford the company the security to consistently and successfully pursue its strategy.»

Dr. Andreas von Planta, Chairman of the Board of Directors of Nationale Suisse, added: «Helvetia is the ideal partner for Nationale Suisse both in Switzerland and abroad. The Board of Directors of Nationale Suisse therefore recommends that its shareholders accept Helvetia's offer. Both Helvetia and Nationale Suisse are able to look back on a long and successful company history, a similar corporate culture and a local presence in Basel. Together with Helvetia we will be able to continue our successful strategy.»

The transaction is planned to conclude in the second half of 2014, subject to the approval of the shareholders of Helvetia Holding AG, those of National-Versicherungs-Gesellschaft AG and the appropriate competition and regulatory authorities. Helvetia today published the pre-announcement of the public tender offer and intends to publish the offer prospectus around 8 August 2014.

Convincing structure of the new insurance group based on three strong pillars
The insurance group resulting from the combination of Helvetia and Nationale Suisse will generate a premium volume of around CHF 9 billion and have a profit potential of more than CHF 500 million. Thanks to its strong position in Switzerland, attractive European market units and the special focus on international «Specialty Lines», the new group combines the proven strengths of both companies, creating ideal conditions for healthy development. The new company will operate under the Helvetia brand name.

Strong Swiss domestic market
The combination will reinforce Helvetia as Switzerland's top-3 insurer, allowing it to become one of the country's leading multi-line insurers. With a premium volume of over CHF 5 billion, the domestic market will remain the main pillar of the combined group. The good balance between life and non-life business, coupled with multi-channel customer access as well as a nationwide sales force, unique partnerships with banks and the direct insurer smile.direct, offer ideal conditions for successful development. The head office of the newly formed Helvetia Group and the management of the non-life insurance will remain in St.Gallen, whereas Basel has been confirmed as the head office of Helvetia Switzerland and will be further strengthened. The offices in Basel are to become the regional non-life hub from where the Nationale Suisse lines Accident/Health, European Travel Insurance and Credit Life will be further developed. The plan is to quickly implement a joint product and service portfolio.

Attractive European insurance markets
The new group will also have attractive prospects in Europe. In the past, Helvetia and Nationale Suisse both operated in Europe's largest insurance markets (Germany, Italy and Spain), and will now be able to pool their resources. In Austria, Helvetia is in the process of becoming one of the country's top-10 insurance providers following the recently announced takeover of Baloise Austria. In Belgium the strategic review initiated by Nationale Suisse has yet to be completed and will be put in concrete terms over the coming months. Overall, the European business will account for a premium volume around CHF 3 billion, making it the second strong pillar of the expanded Helvetia Group.

Specialty Lines as specific growth area
The Specialty Lines division will pool the Marine/Transport, Engineering, Art and Active Reinsurance of Helvetia and Nationale Suisse. This also includes Helvetia France, the number two in the French transport insurance market. Helvetia will continue the success story of the two companies in these business areas - on an enlarged basis with a premium volume of just under CHF 1 billion and at the same time a higher underwriting capacity. Sales cooperation will take place in the local country units in Switzerland and in Europe, and also includes the locations of Nationale Suisse in Liechtenstein, Turkey, Asia and Latin America.

Increased value by joining forces
Thanks to the higher premium volume, the combination of Helvetia and Nationale Suisse brings the possibility of considerable economies of scale and synergies. In the medium term, the combination is expected to generate additional growth opportunities, an improved risk profile and annual cost savings in the region of CHF 100 to 120 million. The combined entity will have a total headcount of around 7,000 employees. Helvetia attaches great importance to ensuring that the exploitation of potential synergies and the preservation of social capital remain evenly balanced. Taking into account the natural attrition rate of around 5 to 10 per cent per annum, a considerable part of the personnel-related efficiency gains in the coming two to three years can be achieved by not replacing staff. If structural redundancies should lead to further staff reductions, these situations will be dealt with in a fair and socially acceptable way. In addition, it is planned that significant savings can be achieved in terms of operating costs, because many of the currently redundant costs (e.g. for IT, marketing, logistics) can be significantly reduced in future.

Joint management boards
The senior management of the enlarged Helvetia Group will include representatives from both companies in order to be able to ensure the successful development of the new company in the best possible way.

The Board of Directors is to be strengthend by the appointment of Dr. Hans Künzle, currently Chief Executive Officer of Nationale Suisse, as the second Vice Chairman, along with Mrs Doris Russi Schurter. In addition, Dr. Andreas von Planta, Dr. Balz Hösly, Dr. Peter A. Kaemmerer and Dr. Gabriela Maria Payer will also be proposed to the Shareholders' Meeting for election to the Board of Directors[1]. Erich Walser will remain Chairman of the Board.

Stefan Loacker will continue to serve as CEO for the expanded Helvetia Group. The Executive Management will be joined by David Ribeaud, who will serve as Head of Specialty Lines in future. The other positions will also remain unchanged.

In future, the key positions in the management teams of the Switzerland, Europe, and Specialty Lines divisions, as well as the group functions, will be held by executives from both companies. The Executive Management of Helvetia Switzerland will include Ralph A. Jeitziner as Head of Distribution and Dr. Armin Suter as Head of IT.

Attractive offer structure, secure acquisition financing and strong balance sheet
To facilitate the combination, Helvetia Holding AG (Helvetia) is submitting a public tender offer to the shareholders of Nationale Suisse for all publicly held shares of Schweizerische National-Versicherungs-Gesellschaft AG (Nationale Suisse) with the exception of the 18.7 per cent stake already held by Helvetia and Patria Co-operative. The quoted price of CHF 80 per Nationale Suisse share implies a premium of 26 per cent in relation to the closing price of the Nationale Suisse share on 4 July 2014 and comprises a cash component of CHF 52 (65 per cent) and an equity component of 0.0680 newly issued Helvetia shares (CHF 28; 35 per cent). Thanks to the equity component, the shareholders of Nationale Suisse will also be able to benefit from the increase in value of the new insurance group.

The offer's 65-per-cent cash component in the amount of CHF 931 million is secured by means of a guaranteed bridge loan, which will be refinanced on the capital markets by means of senior and hybrid bonds upon completion of the transaction. The offer's 35-per-cent equity component in the amount of CHF 501 million is to be provided in the form of new Helvetia shares, the issuance of which the shareholders shall vote on, prior to the expiry of the offer period at an extraordinary Shareholders’ Meeting of Helvetia. The strong key shareholders of the Helvetia Group comprising the Patria Co-operative (30.1 per cent), Raiffeisen Switzerland (4.0 per cent) and Vontobel (4.0 per cent) intend to support Helvetia's offer for Nationale Suisse and the planned capital increase. The parties of this shareholders' pool also intend to offset the dilution of their stake in Helvetia as a consequence of the public tender offer in accordance with the pool contract by means of market acquisitions.

The expanded Helvetia Group will continue to retain its excellent capital ratios following completion of the transaction: Helvetia anticipates that the new company will have a healthy balance sheet with a solvency I of over 200 per cent and a strong SST (Swiss Solvency Test) ratio in the region of 150 to 200 per cent and expects as before to qualify for a Standard & Poor's rating in the «A» range[2]. The potential for future dividends will be improved by the acquisition. Helvetia expects the normalised dividend per share[3] to increase, starting from as early as the first year after conclusion of the transaction.

Preliminary schedule
7 July 2014: Pre-announcement of the public tender offer
8 August 2014: Publication of the offer prospectus
25 August – 19 September 2014: Offer period[4]
26 September – 10 October 2014: Additional acceptance period
20 October 2014: Completion

[1] This is subject to the conclusion of the transaction and confirmation by the Shareholders' Meeting.
[2] Internal pro forma analysis. Confirmation has yet to be received from the rating agency.
[3] Without IFRS amortisation of intangibles and restructuring costs.
[4] Helvetia reserves the right to extend the offer period once or serveral times and/or to postpone the conclusion of the offer in accordance with the applicable provisions. The subsequent dates would change accordingly.

Invitation to the press conference
Invitation to the analysts' conference

• A joint press conference by Helvetia and Nationale Suisse including a conference call in German will be held today, Monday, 7 July 2014, at 10.00 a.m. The press conference will take place at SIX Group Services AG, ConventionPoint, Selnaustrasse 30, 8021 Zürich. Members of the press can dial in from 9.45 a.m. by calling +41 (0)58 310 50 00.
• A joint analysts' conference by Helvetia and Nationale Suisse including a conference call in English will be held at 12.00 noon at the same place. Analysts can dial in from 11.45 a.m. by calling +41 (0)58 310 50 00 (Europe), +44 (0)203 059 58 62 (UK).
• A repeat of both conferences will be available online at www.helvetia.com from about 4.00 p.m.
The advance notice of the public purchase and exchange offer and the slides for the press and analysts' conference can be downloaded immediately online atwww.helvetia.com/tender-offer.

This press release is also available on the home page www.helvetia.com/media.

Contact information
Helvetia Group
Susanne Tengler
Director Investor Relations
Dufourstrasse 40
CH-9001 St.Gallen

Phone: +41 58 280 57 79
Fax: +41 58 280 55 89
Helvetia Group
Martin Nellen
Head Corporate Communications
and Brand Management
Dufourstrasse 40
CH-9001 St.Gallen

Phone: +41 58 280 56 88
Fax: +41 58 280 55 89