Sampo (SAMPO) M&A Announcement summary

Deal rationale and strategic fit

• The transaction consolidates a leading position in the Nordic P&C insurance market, making Denmark the largest geography for the acquirer with a 21% market share and 29% of Nordic premiums.

• The deal is driven by converging strategies, digitalization, and a focus on high-quality non-life insurance, unlocking growth and operational synergies.

• Enhanced scale and complementary skills are expected to improve competitive positioning and enable further growth in Denmark and the Nordics.

• The transaction simplifies governance, supports a pure P&C insurance focus, and leverages digital platforms for productivity and profitability improvements.

• The deal offers a 27% premium to target shareholders and participation in future value creation.

Financial terms and conditions

• The offer is fully share-based, with target shareholders receiving 1.25 new shares in the acquirer for each share tendered, valuing each share at DKK 366.38 and the total equity at DKK 33 billion.

• The offer represents a 27% premium to the target's closing price on 14 June 2024.

• Up to 57,468,782 new shares will be issued, with target shareholders potentially owning up to 10.3% of the combined entity.

• Sampo will initiate a EUR 800 million buyback program in two steps, including a potential squeeze-out.

• Sampo seeks a secondary listing of its A shares on Nasdaq Copenhagen upon completion.

Synergies and expected cost savings

• Annual pre-tax run-rate synergies are estimated at EUR 95 million by 2028, with EUR 65 million from cost and EUR 30 million from revenue synergies.

• Major synergies stem from IT integration, head office duplication avoidance, procurement, and pricing model integration.

• One-off integration costs of approximately EUR 150 million will be incurred upfront.

• EPS accretion is projected at approximately 6%, with two-thirds from share buybacks and one-third from transaction effects.

• Cost synergies will be realized gradually, with most achieved by end of 2027 and full run rate by 2028.