FRANCE, May 23, 2001 (PRIMEZONE) -- As a result of the negotiations announced on April 4, 2001, SCOR's Board of Directors unanimously approved the contribution agreement pursuant to which SCOR will acquire the full ownership of Sorema S.A. and Sorema N.A., the reinsurance subsidiaries of GROUPAMA. This contribution agreement, which was executed today, will be submitted to the approval of SCOR's Extraordinary Shareholders meeting which should take place at the end of June 2001.
A Continued Strategy of Organic Growth and Targeted Acquisitions
The acquisition of Sorema is in line with SCOR's strategy and marks a new stage in its policy of growth and international expansion.
Founded in 1978, Sorema is 100%-owned by GROUPAMA, France's second-largest composite insurer. It specializes in Property & Casualty reinsurance, principally in Europe, North America and Asia. The company's business portfolio which will be maintained by SCOR after the acquisition, will strengthen the Group's competitive stance without significantly altering the balance between its three core activities: Property & Casualty, Life, Accident & Health and Specialty reinsurance.
This acquisition will also lead to an increase in SCOR's equity, which will help support the strong growth of its businesses.
The company's Chairman and CEO Jacques Blondeau told the Board, "Sorema is a natural acquisition for SCOR and the timing is excellent. It is natural since Sorema and SCOR's Property and Casualty reinsurance activities fit ideally in geographical terms. In light of the current upturn in the Property & Casualty sector, the timing is also excellent. It also reinforces our solvency and our equity which will benefit the development of all the group's businesses."
Acquisition Terms
Sorema will be acquired exclusively in exchange for SCOR shares. The transaction will be valued namely on the basis of the adjusted net asset value of Sorema S.A. and Sorema N.A., as of December 31, 2000, i.e. EUR 344 million. For the purposes of this transaction, one SCOR share is valued at EUR 54, around 10% higher than the average price over the last few weeks on the Paris Bourse.
GROUPAMA will hence receive 6,370,370 new SCOR shares issued for this transaction. The resulting increase in shareholders' equity will therefore amount to approximately EUR 344 million, including an increase in capital of EUR 24 million and a premium of EUR 320 million.
GROUPAMA, which will become SCOR's largest shareholder with a 17% stake including its existing interest, has indicated that this shareholding is a long-term investment that will consolidate the shareholder base of SCOR and reinforce the excellent relationship that exists between the two groups.
The deal does not include some of Sorema's businesses, mostly originating from the past activities of GAN and Broadgate, Sorema's Syndicate at Lloyd's
Guarantees have been granted by GROUPAMA regarding technical, tax and social liabilities.
Acquisition Boosts Growth Prospects and Earnings for SCOR Shareholders
The climate in the Property & Casualty reinsurance business is once again positive and the acquisition of Sorema provides SCOR Group with a significant boost, helping to reinforce its position as one of the world's leading reinsurers. Given the expected level of premiums to be retained and the increased equity, SCOR's solvency will be significantly improved.
The second half of 2001 will be a transitional period devoted to the merger of the workforces and portfolios, and the implementation of the new organization.
Due to the synergies to be realized, the operating result of Sorema's retained businesses and the additional financial revenues that they generate, this acquisition should be accretive as of 2002.
With increased financial resources and stronger subscription and management teams, SCOR will pursue a strategy of balanced growth that will enable it to achieve the profit objectives that it has set for the next two years.
Certain statements contained in this press release are forward-looking statements that are based on risks and uncertainties that could cause actual results, performance or events to differ materially from those in such statements. Additional information regarding risks and uncertainties is set forth in the current annual report of the company.
With 30 offices around the world, serving clients in over 150 countries, SCOR is France's largest reinsurer and one of the industry world leaders. Thanks to its ability to provide innovative technical and service support, SCOR Group has built up a well balanced portfolio of Property and Casualty, Life, Accident & Health and Specialty reinsurance products and services. The Group's ratings, which include AA from Fitch IBCA, A+ (Superior) from AM BEST and AA- from Standard & Poor's, reflect its financial strength and underwriting expertise. SCOR shares, which belong to the SBF 120, Bloomberg European Insurance and Dow Jones STOXX indexes, are listed in Paris, Frankfurt and New York. SCOR has a widely diversified international shareholder base, with more than 30 000 shareholders in 55 countries.
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