As from the year 2000 such announcements are published here on Munich Re's website as well as in other media.
20 March 2003
| Translation of the German ad-hoc announcement
Munich Re and Allianz to reduce their reciprocal shareholdings further
Munich Reinsurance Company and Allianz AG will reduce their
reciprocal shareholdings to around 15%. The existing long-term
partnership between the two groups is to be continued on this
basis.
Munich Re intends to reduce its shareholding by performing an
opération blanche in the capital increase
announced by Allianz today. An opération
blanche involves the shareholder taking part in a capital increase
to the extent that no new funds are invested and the investment is
maintained at the current level in value terms. Allianz will redeem
its MILES bonds issued in 2000 by exchanging them for Munich Re
shares, thus reducing its stake in Munich Re from around 22% (end
of 2002) to a level of between 16% and 18% before the end of 2003.
The effect of reducing shareholdings on both sides will be that the
respective participations are no longer valued at equity;
consequently, Munich Re will in future book the dividend of Allianz
instead of the proportional result for the year in its income
statement. Furthermore, the groups' free floats and thus the
weightings of their shares in stock market indices will
increase.
Munich Re is not planning any capital increase at this time.
Rather, it shortly intends to strengthen its capital base through
the issue of subordinated bonds. The specific features of this
hybrid capital mean that it is recognised by the markets,
supervisory authorities and rating agencies as equity capital.
Through this issue Munich Re can target new groups of investors
outside the stock market worldwide and further strengthen its
position on the international reinsurance markets in the present
upward phase.
As announced, Munich Re will be publishing its main figures for
the business year 2002 on 27 March; additional information on the
bond issue will also be provided on this occasion.
Munich, 20 March 2003
Munich Reinsurance Company
Board of Management
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