Allianz SE, Europe's biggest insurer, is selling a €750 mln ($973 mln) stake in Bayerische Motoren Werke AG, to raise money to invest in the insurance division.
Merrill Lynch & Co. is managing the sale of 16.1 million shares, Munich-based Allianz , which currently owns about 4% in BMW, said in an e-mailed statement. The shares, equal to about 2.7% in BMW, are being offered for between €45.55 and €46.55 per share to investors today, according to details sent by the US brokerage to clients. Allianz, once one of the most power corporate investors in Germany, like other financial institutions including Deutsche Bank has reduced decade-old stakes and invested the money in its insurance business. Last month it agreed to buy the rest of Assurances Generales de France for €9.8 billion, Allianz's largest purchase since the $21 billion takeover of Dresdner Bank in 2001, after buying out minority shareholders in Italy's RAS Holdings SpA for €5.7 billion in 2005.
„Allianz needs the money to finance the AGF buyout,” said Konrad Becker, an analyst at Merck Finck & Co. in Munich, who has a „buy” rating on the stock. „They probably made a nice profit on BMW so decided to sell now.” Shares of BMW declined 81 cents, or 1.7%, to €45.74 at 10:09 a.m. in Frankfurt. The carmaker's stock gained 16% last year, compared with a 22% rise for Germany's benchmark DAX, and closed at €46.55 yesterday, the upper end of the price range Allianz is offering the BMW stock for. Allianz last month said it's reducing its stake in Munich Re, the world's second-biggest reinsurer, to below 5% from 9.4% to repay a portion of a convertible bond. The insurer also cut its stake in KarstadtQuelle, Germany's biggest department-store chain, to 2.6% from 7.6% in January.
Allianz, a 117-year-old insurer that operates in 70 countries, changed its legal structure to a pan-European company at the time of the RAS deal, making it easier to carry out cross-border purchases. It last month also offered to buy out minority investors in its German life insurance unit, Allianz Leben, and the 50% of a Taiwan life insurance venture held by its partner, Uni-President Enterprises Corp. The insurer in November said it may use some of €7 billion of „excess capital” to buy back stock and raise the amount of profit it pays in dividends to 40% in the future from just below 20% currently.
Following the BMW transaction, Allianz still holds about 12% in Heidelberger Druckmaschinen AG, the world's largest maker of printing machines, and 9% in Linde AG, the world's largest maker of industrial gases, worth about €1.9 billion combined. BMW's main shareholder is the billionaire Quandt family, which includes supervisory board members Stefan Quandt and Susanne Klatten. The Quandts hold 46.6% collectively of the world's larger manufacturer of luxury cars. (Bloomberg)