Carlo Cimbri today unveiled the numbers of the four-way merger plan with Fondiaria Sai, which will be operational from the beginning of 2013. The Great Unipol will be made up of two listed companies: UGF and Unipol-Fonsai. The companies Linear, Unisalute, Unip Banca, Arca and other participations will report directly to the first, as well as the other listed company Unipol-Fonsai, under whose hat Unipol Assicurazioni, Fonsai, Milano and Premafin will end up.
Overall, non-life premium income in 2015 will be 10,3 billion, down from 11,4 billion in 2011 due to the transfer of premiums requested by the Antitrust. “The Antitrust has asked us to transfer 1,7 billion in premiums for the the prevalent part in the Motor TPL portfolio – Cimbri explained – It is 2,7 billion in non-life reserves and 1,3 billion in life. We have already received expressions of interest”. But profitability is expected to recover greatly with a combined ratio down from 104,2% (end of 2011 from aggregate data) to 93% in 2015. This means a positive technical result of 612 million against a loss of 699 million for the year last year. Premiums are expected to increase to 7,2 billion in the life area. While the solvency margin will settle at 143% with Solvency II (169% Solvency I).
The synergies envisaged by the integration are estimated at 2015 million in 345, an estimate defined by Cimbri as "prudential". In detail, there will be 169 million in synergies in terms of operating costs, 122 million deriving from industrial management and 54 million from the increase in productivity and changes in terms of Asset & Liability management (Alm) "by pooling financial assets, on which we will adopt a unitary management”
The consolidated profit of Grande Unipol of 880 million and of Unipol-Fonsai of 821 million. For 2012 the groups remain separate and Cimbri confirmed the 250 million profits for the Unipol group alone. "From 2013, the progression of results is expected to be rather linear: it is not a plan that envisages a peak in 2015 but is rather linear in development", he added, explaining that cumulative profits for 2013-2015 exceed 2 billion euros. The payout in 2015 is estimated at between 60 and 80%.
After yesterday's go-ahead from Antitrust and Isvap, the Consob verdict is now missing and is expected for next week: the Authority must decide on the exemption from the takeover bid by Unipol on Milano Assicurazioni. “We are confident in a positive response”, commented Cimbri but Unipol would stop if Consob decides for the takeover bid. On the table remains the question of the binding stakes set by Consob on the waiver by the Ligresti on indemnity and right of withdrawal, conditions which the family has decided not to renounce. But a possible liability action against the old directors of Fondiaria-Sai promoted before the merger with Unipol, and on the table of the Fonsai board, could solve the problem of indemnity for the Ligresti family that Consob is asking to eliminate to exempt the company Bolognese from the takeover bid obligation.
The capital increase is thus scheduled for the first ten days of July. “We are still making the necessary assessments with the guarantee syndicate, but we expect that in the first 10 days of July, market conditions permitting, it will be time to start the capital increases”, said Cimbri.
In the meantime, the findings made by Consob on Fonsai's financial statements shouldn't represent a problem for the merger: “they won't have any impact on the documentation that Fonsai is preparing. As far as I know – he said – everything proceeds in parallel for both capital increases. These are findings that have no impact on equity, solvency or the goodness of the numbers. They rather have the taste of correctness and adherence to accounting principles and representations”. The total capital increase for Unipol Fonsai is €1,7bn.
But even Unipol's financial statements do not escape controversy: a report by Ernst&Young, made known by the Linkiesta website, speaks of instruments held to maturity and loans and receivables which account for 41% of the portfolio and which, based on the prices provided by Unipol, include a latent capital loss of approximately 1,2 billion. ”In recent months we have chosen not to respond to provocations artfully put out by someone with purposes other than saving the Fonsai group. We have not commented on the fantasies of the advisors that someone has come into possession of and spread them”, said Cimbri, specifying however that he had not yet seen the article in question.
And Mediobanca, the great director of the whole operation? “Unlike what happens in Fonsai, in tomorrow's group Mediobanca will neither be a lender of UGF, nor of UGF shareholders, nor of other activities. It will just be a credit provider like many others, having said that we have and hope to maintain excellent relationships with the people and management of Mediobanca”, said Cimbri, answering an analyst's question on the reduction of debt towards Piazzetta Cuccia. Unipol, assures Cimnbri, “is working to reduce the concentration of debt, but there is no commitment in this sense. If we have the market conditions we will not hesitate to reduce the debt towards Mediobanca. Furthermore, we will sell the equity investments because it is not part of the group's core business to have shares in other banks with which it is not linked for industrial reasons and we do not have any with Mediobanca”.
On the Stock Exchange Unipol rose by 2,38%, Fonsai by 2,38%, Premafin by 1,19% and Milan by 1,33%
