Allianz Group and Dresdner Bank

Transcription

1 Allianz Group and Dresdner Bank London, April 3, 2001 page 3/21/020

2 Agenda Allianz Group and Dresdner Bank Business Rationale Why are we doing this transaction? What are the potential synergies? Transaction Rationale What is the structure of the transaction and its benefits? What will be our governance structure and priorities going forward? page 3/21/02 1

3 Why are we doing this transaction? Provides us with a unique position in the attractive long-term savings market in Germany Allows us to secure control of bank distribution which is key to effective penetration of German retail market for mutual funds and equities Creates a leading asset management franchise with presence in all key regions and superior depth and breadth of investment styles / products Opens a new range of strategic options Reduces excess capital and optimises capital allocation in strategic assets Accelerates earnings growth for our shareholders page 3/21/02 2

4 Why now? Expected Pension reform requires organizational preparation Sales forces Systems Products Dresdner structural reforms on track Managerial credibility Cost savings ahead of plan Strategic movements in European financial services page 3/21/02 3

5 Attractive long-term savings market in Germany Germany with large growth opportunity Shift in asset mix Holdings of long-term savings assets ( bn) 2,738 CAGR 100 % 100 % % Deposits ,521 Bonds 13 9 Life % Life Equities Investment Funds % Equities Investment Funds E E Source: McKinsey Research page 3/21/02 4

6 Multiple channels necessary to capture growth across products Distribution channels Growth rate p.a. *) Agents Bank branches Other Equities N.A. 92 % < 8% 14 % Funds 12 % 72 % 16 % 17 % Life 49 % 20 % 31 % 9% *) CAGR , Source: JP Morgan Research, BVI, annual reports page 3/21/02 5

7 Our customers will have channel choice Individual clients in Germany Customers financial needs Protection Products P&C Health Term life Long-term savings Life (whole, unit linked) Mutual funds Corporate pensions Credit / financing Mortgages Loans Consumer credit Transaction / Services Brokerage Credit cards Current account Allianz Distribution channels Agents Planners Branches Remote (telephone and online) Allianz Financial Planners Dresdner Vermögensberatung Advance Bank Dresdner Bank page 3/21/02 6

8 We have a strong customer base Joint customer access of Allianz and Dresdner Bank to clients in Germany 100 % > 95% 31% 37% 50% Individuals Households Companies 200 largest corporates Source: Icon Finanz-Vertriebsmonitor, company estimates page 3/21/02 7

9 We are leading in long-term savings products Provision of mutual funds and life products for German individuals Funds* Life** 15.7 % Allianz + Dresdner Bank 15.1 % 19.4 % Savings banks 11.2 % 1.1 % Allianz 15.1 % 21.6 % Deutsche Bank 4.0 % 14.7 % Cooperative banks / R+V 4.7 % N.M. 0.4 % AMB / Generali Munich Re 8.2 % 9.8 % 14.6 % 10.6 % Dresdner Bank Commerzbank N.M. AXA 4.0 % 4.7 % HypoVereinsbank *) Market share, funds under management 1999 **) Market share, gross written premiums 1999 Source: BVI, annual reports page 3/21/02 8

10 We are creating a leading franchise in asset management Assets under management ( bnin 2000) Allianz + Dresdner Bank Total Ranking Global Total 750* 272 1,022 Top 5 Retail # 4 3 rd party Germany Institutional # 1 *) Including Nicholas Applegate Source: BVI, company reports page 3/21/02 9

11 We have a full range of asset management products available Germany UK Italy France Europe AAM DIT / dbi DRCM UK RAS AM AGF AM DRCM (France) Fixed income Equity Growth Equity Core Equity Value US PIMCO Nicholas Applegate Cadence Oppenheimer Capital RCM Asia DRCM Hong Kong AAM Asia Pacific Singapore DAM Singapore AAM Australia Meiji Dresdner Japan Hana - Allianz Korea DRCM Sice Taiwan DRCM Malaysia Allianz Dresdner Bank page 3/21/02 10

12 Agenda Allianz Group and Dresdner Bank Business Rationale Why are we doing this transaction? What are the potential synergies? Transaction Rationale What is the structure of the transaction and its benefits? What will be our governance structure and priorities going forward? page 3/21/02 11

13 Accelerated growth achievable Accelerated growth - Insurance sales in bank channel - Mutual funds sales and life pay-outs capture in agency channel - Accelerate build up of financial planner - Capture expected growth in corporate pensions Efficiency gains - Integration of asset management, mortgage and building society units - IT-platform investments (e-/m-commerce, CRM, brokerage) - Marketing costs for financial planner - Corporate center Capital efficiency page 3/21/02 12

14 Focus on revenue synergies Bank-channel distribution in the German market - Potential to increase of number of life policies sold through Dresdner by up to 5 times - Potential to increase of number of p&c policies sold through Dresdner by up to 37 times Asset gathering through agents - Uncaptured life insurance pay-outs to Allianz policy holders of 5.8 bn p.a mio. of Allianz customers without investments in mutual funds (DIT opportunity) Distribution through financial planners - More than 200,000 Advance Bank customers approachable by new FP channel - Faster recruiting of financial planners Distribution of corporate pensions - Growth through planned tax benefits and employee entitlement of deferred compensation - Large share of pension market captured through corporates and workplace marketing - Large combined corporate customer base Source: Company reports, market research page 3/21/02 13

15 Potential productivity increases through full integration of insurance into banking business system Number of products sold per 1,000 customers Life insurance P&C insurance 9 Dresdner Bank today Best practice 1 23 Arm's length cooperation within one financial services group Insurance is integral part of banking business system 37 5x Productivity effects rising with integration into bank business system 37x Source: McKinsey page 3/21/02 14

16 Planned pension reform in Germany favors corporate pension solutions Riester Reform to improve attractiveness of corporate pensions for industrial employees (e.g., transferability of assets) Tax-advantaged contributions for private old-age pensions are based on salaries and require payroll information Workplace marketing seen as a key distribution mechanism Estimates suggest that by 2008 over 60 % of tax-incentivized investments will be provided through corporate pension solutions Source: Tax reform proposals page 3/21/02 15

17 Agenda Allianz Group and Dresdner Bank Business Rationale Why are we doing this transaction? What are the potential synergies? Transaction Rationale What is the structure of the transaction and its benefits? What will be our governance structure and priorities going forward? page 3/21/02 16

18 Transaction structure objectives Reduce cross-shareholdings (incl. Allianz Life) while creating strong financial services partnership Leverage Allianz' excess capital and Dresdner's 10% stake in Allianz Avoid net capital increase Minimize goodwill Increase Allianz free float Ensure tax efficiency page 3/21/02 17

19 Transaction overview: Recommended offer to Dresdner shareholders Offer terms will be 1 Allianz share plus 200 per 10 Dresdner shares Result of a combined offer by Allianz and a special purpose vehicle (SPV) (led by Deutsche Bank) - Allianz offers cash and tenders for all shares of Dresdner Bank - Dresdner Bank shareholders transfer claim for cash payment against Allianz to SPV and get Allianz shares - Dresdner Bank shareholders can only accept combined cash and share offer Offer values Dresdner Bank shares at each - based on volume weighted average price of Allianz shares on March 30, 2001 Formal offer to be launched by mid to end of May Closing expected in 3 rd Quarter 2001 Conditional on regulatory approval page 3/21/02 18

20 Timetable Supervisory Board Dresdner Shareholders' meeting Dresdner Closing (after shareholders' meeting) Confirm. due diligence Mid to end May Offer period 60 days Dependent on Acceptance takeover Approval EU-Commission Supervisory Board Allianz Shareholders' meeting Allianz Settlement-forward contracts 2002 Shareholders' meeting Dresdner Formation of Investment Banking as a separate legal entity (Teilbetriebsausgliederung) Shareholders' meeting Allianz Approve capital reductions (remaining treasury shares from Dresdner and shares from buy back program) page 3/21/02 19

21 Transaction structure Allianz Bid Co Cashoffer Dresdner shares Dresdner shareholders Allianz shares Capital increase Part transfer of claim for cash payment against Allianz Forward seller Allianz shares SPV Allianz shares Securities lender Per 10 Dresdner shares - 1 Allianz share from SPV cash from Allianz Sources of Allianz shares in SPV - Authorized capital* 8 % - Forward sale* 10.2 % Netting of shares in Allianz shares held by Dresdner Bank - Share buy-back Share buy-back mechanics - Up to 3.5 % - Program to begin immediately (as appropriate) No net equity issuance by Allianz *) Before dilution page 3/21/02 20

22 Share buy-back essentials No net new shares are to be issued as a result of the transactions On the basis of full acceptance of the offer by Dresdner shareholders, the maximum number of new shares to be issued into the SPV is 19.7 million (8% of issued shares) With immediate effect, Allianz is able to repurchase up to 8.7 million shares, representing 3.5% of issued shares Post-acquisition of Dresdner Bank (by 2002), Allianz intends to cancel up to 11 million of its shares currently owned by Dresdner Bank (remainder previously sold to SPV) Timing differences will arise between issue and buy-back/cancellation of the shares The share buy-back will be executed through purchases in the market Subject to when market conditions make it economic to commence buy-backs, the actual number of shares in issue might fall or increase temporarily page 3/21/02

23 Other related transactions Allianz to acquire ~ 40 % stake in Allianz Leben held by Munich Re in 2002 Allianz and Dresdner Bank intend to sell ~ 16 % stake in HypoVereinsbank to Munich Re Allianz and Dresdner Bank intend to sell up to ~ 7 % stake in Munich Re to SPV for Ergo minority buy-out Last year Allianz and Munich Re have announced their intentions to transfer stakes in - BVB 45 % from Munich Re to Allianz - Frankfurter 49.9 % from Munich Re to Allianz - Karlsruher Leben 36.1 % from Allianz to Munich Re - Mercur 39 % from Allianz to Munich Re page 3/21/02 22

24 Acquisition of 40,57% Allianz Leben from Munich Re Why are we doing this transaction Allianz Leben as unique production unit of life and pension products in Germany Actuarial know how essential to succeed in the long term savings market Allianz Leben as meaningful part of Allianz Dresdner financial services unit Consideration per Allianz Leben share: Key figures 2000 Profitability development Equity: 1,074 AuM: 87 billion Gross premiums ( billion) page 3/21/02 23 Profitability development

25 Preliminary financing considerations EUR billions Assuming 100% acceptance Allianz Holding Dresdner Bank Holding ~ 31 ~ 6 ~ % 2.5% 13.5% Munich Re HypoVereinsbank HypoVereinsbank Dresdner bid valuation Existing Allianz stake in Dresdner (20%) Asset stakes to be sold 10.0% Allianz ~ Allianz internal liquidity ~ Debt financing Subordinated Senior/ exchangeables page 3/21/02 24

26 Financials *) Allianz Dresdner Bank 80 % Financing / Goodwill Pro forma Net income bn 1.4 bn bn 3.0 bn Net income 2001e 2.6 bn 1.0 bn **) bn 3.0 bn EPS / 13 % Cash-EPS 2001e / 26 % EVA Transaction EVA positive by 2003 *) Assumes: 100 % acceptance, no synergies, no transaction costs **) According to IBES page 3/21/02 25

27 Related capital markets benefits Efficient deployment of Dresdner Bank stake in Allianz AG Efficient use of other stakes in Allianz AG held by various parties - increases free float in Allianz by 14 percentage points to almost 80 % - removes market overhang - enhances index weightings Frees up capital for reallocation from financial stakes into strategic business activities Exchange of HypoVereinsbank and part of Munich Re holdings into Dresdner Bank and Allianz Leben stakes page 3/21/02 26

28 Unbundled shareholdings After transaction Allianz ca. 23 % ca. 22 % Münchener Rück 90.9 % < 100 % > 25 % 13.3 % < 95 % Allianz Leben Dresdner HypoVereins- Bank ERGO page 3/21/02 27

29 Agenda Allianz Group and Dresdner Bank Business Rationale Why are we doing this transaction? What are the potential synergies? Transaction Rationale What is the structure of the transaction and its benefits? What will be our governance structure and priorities going forward? page 3/21/02 28

30 Organizational structure CEO Dr. Schulte-Noelle Business Units Allianz Dresdner Financial Services Allianz Dresdner Asset Management Dresdner Kleinwort Wasserstein Europe I Europe II Americas Growth Markets Prof. Dr. Fahrholz (Deputy CEO) Dr. Faber Fischer Dr. Hagemann Bremkamp Hansmeyer Diekmann Functions Finance Accounting, Controlling, Tax Financial Risk Management Corporate Human Resources Corporate Information Technology Dr. Achleitner Dr. Perlet Dr. Müller Diekmann Dr. Rupprecht page 3/21/02 29

31 Our five strategic priorities Optimize the economic value-added of our group, based on risk-adequate capital requirements and sustainable growth targets Capitalize on high-growth market opportunities by leveraging our traditional risk management expertise Build on our leading position in long-term savings and protection products by focusing on our clients old-age provision requirements Expand our asset gathering capabilities by building customer-specific, multichannel distribution platforms Continue to expand our investment and capital markets expertise page 3/21/02 30

32 Our five business principles We believe that we can serve our shareholders best by giving priority to our clients We realize that our continued success is based on our reputation, our acceptance by society and our ability to attract and retain the best people We attempt to foster the entrepreneurial spirit of our local group companies while providing the leverage of a global institution We recognize that a sustainable performance requires primary focus on operational excellence and organic growth, occasionally supported by profitable acquisitions We aim to be among the top five competitors in the markets in which we choose to participate page 3/21/02 31

33 Disclaimer NOT FOR RELEASE, PUBLICATION OF DISTRIBUTION IN WHOLE OR IN PART IN OR INTO AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES OF AMERICA All rights reserved. The content and structure of the presentation are protected by copyright. No part of the information, whether data, text or image, may be used or reproduced in any form without the prior written permission of Allianz and Dresdner Bank. Allianz and Dresdner Bank make reasonable efforts to provide accurate and current information, but make no representations about the accuracy, reliability, completeness, or timeliness of the material. Use of the material is at the user's own risk. Allianz and Dresdner Bank reserve the right to make changes at any time. The presentation may contain information and other material provided by third parties. Neither Allianz nor Dresdner Bank is responsible for the content provided by these third parties. Financial projections and other forward-looking statements reflect only management goals for the future, on the attainment of which no assurances can be given. Indeed, such statements are subject to unforeseeable and uncontrollable risks, including, but not limited to, adverse market, political, fiscal or economic changes, currency fluctuations, the behaviour of other market participants, the action of governmental and market regulators, severe weather events, natural catastrophes, or other acts of God, any of which may cause actual results to differ. Readers are cautioned not to place undue reliance on these forward-looking statements, which anyway speak only as of the date of this document. Allianz and Dresdner Bank do not undertake any obligation to publicly release any revisions to forward-looking statements to reflect events or circumstances after the date of these materials. THESE MATERIALS DO NOT CONSTITUTE AN OFFER OF, OR INVITATION TO PURCHASE, ANY SECURITIES IN ANY JURISDICATION. ANY SUCH OFFER WILL ONLY BE MADE IN DOCUMENTS TO BE PUBLISHED IN DUE COURSE AND ANY SUCH INVITATION SHOULD BE MADE SOLELY ON THE BASIS OF INFORMATION PROVIDED IN THOSE DOCUMENTS. page 3/21/02 32