NU Polish Pension & Life Sale
CGNU PLC
20 September 2000
SAMPO BUYS NORWICH UNION'S PENSIONS AND LIFE BUSINESSES
IN POLAND FROM CGNU
Sampo Insurance Company plc ('Sampo'), Finland's largest
insurance group, and CGNU plc ('CGNU'), the UK's largest
insurance group, today announces that they have agreed the
sale and purchase of 100 per cent of the equity in each of PTE
Norwich Union S.A. ('PTE NU'), the pensions provider, and
Norwich Union Towarzystwo Ubezpieczen na Zycie S.A. ('NU
Life'), the life insurance company. Each transaction is subject
to separate Polish regulatory approval and Anti-Monopolies Office
clearance.
The consideration for PTE NU is Euro 189 million (£114 million)
and the consideration for NU Life is Euro 47.5 million
(£29 million), subject to certain performance criteria on the
future growth of customer numbers. Completion is expected by
30th November 2000.
The merger of CGU plc and Norwich Union plc to form CGNU caused
the Polish pensions regulator to require CGNU to sell one of
its two pension businesses in Poland. Under Polish pensions
regulations, pension operating licences are restricted to one
per group. As announced in May, CGNU decided to dispose of PTE
NU and retain the CGU pensions business. CGNU also decided to sell
NU Life with the pensions business, reflecting the strong
operational links between the two businesses. Following this
decision, CGNU conducted a competitive tender for the sale.
PTE NU is the fifth largest pension provider in Poland
(measured in terms of registered customers) with a market share
of around 4.8%. NU Life was launched in February of this year
and has reached an impressive 6th place in the market in terms
of new insurance policies sold. As of end-August 2000, it had
issued over 12,000 policies.
Mr. Jouko Leskinen, Sampo's Chief Executive Officer, said:
'This acquisition is an important part of Sampo's strategy to
internationalize its business, in particular in the markets of
Central & Eastern Europe. We see the acquisition of PTE NU and
NU Life as an unique, high quality opportunity for Sampo and
the new Sampo-Leonia Group to enter the high growth and large
Polish insurance and pensions markets. We do not believe that
similar opportunities will emerge in Poland for the foreseeable
future. We believe that Sampo's long experience in life and
pension insurance business provides a solid foundation for
growth in Poland, too.'
Mr. Richard Harvey, CGNU Deputy Group Chief Executive, said:
'I am delighted with the swift conclusion of these transactions
which demonstrate the value which we were able to create in
Poland. We will now be working closely with Sampo to seek to
ensure rapid and satisfactory regulatory approval.'
Enquiries:
Sampo Insurance Company plc
Mr. Juhani Kangas
Senior Vice President, Strategic Business Development
Tel: +358 10 514 4002
Mr. Jarmo Salonen
Vice President, Development, Sampo Life
Tel: +358 10 514 3900
Mrs. Taru Narvanmaa
Investor Relations Manager
Tel: +358 50 590 9398
Mr. Matti Saarinen
Vice President, Corporate Marketing
Tel: +358 40 505 0667
+358 20 425 4122
Mr. William Wells
Director, Chase Manhattan Tel: +44 (0)20 7382 8246
(Principal advisers to Sampo in the purchase)
CGNU plc
Mr. Tom Fraser
Managing Director, Europe Tel: +44 7710 835 419
Mr. Steve Riley
Investor Relations Director Tel: +44 (0)20 7662 8115
Mr. Charles Lucas
Director, ABN AMRO Tel: +44 (0)20 7678 1846
(Principal advisers to CGNU in the sale)
Mr. Alex Child-Villiers
Financial Dynamics Tel: +44 (0)20 7269 7107
NOTES TO EDITORS
* Sampo is the leading insurer in Finland. On December 31, 2000
Sampo will become the parent company of the first full-service
financial group in Finland when Leonia plc will merge with
Sampo. The new Sampo-Leonia will offer comprehensive banking,
asset management, life and non-life insurance services.
Furthermore, Sampo-Leonia networks will offer the pension
insurance products of Varma-Sampo, the largest earnings-related
pension insurer in Finland and a co-operation partner of Sampo-
Leonia.
* CGNU plc is the UK's largest insurance group and the world's
sixth largest insurer based on gross worldwide premiums. The
group was created from the merger of CGU and Norwich Union on
30 May 2000.
* PTE NU commenced operations in March 1999 when the State
pensions system in Poland was changed. NU Life began
operations in early 2000.
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