Muenchener Rueckversicherungs-Gesellschaft AG — M&A Activity 2007

Oct 17, 2007

News Details

Ad-hoc | 17 October 2007 07:43

Munich Re concludes agreement to acquire specialist US primary insurer The Midland Company (Midland)

Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München / Acquisition

Release of an Ad hoc announcement according to § 15 WpHG, transmitted by
DGAP - a company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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As part of its realignment in the US insurance market, Munich Re has
concluded an agreement with US primary insurance company Midland – via its
subsidiary Munich-American Holding Corporation – under which Munich Re will
acquire 100% of the shares in Midland. The agreement provides for an
acquisition price of US$ 65 per share; the total offer amounts to around
US$ 1.3bn (€0.9bn).

Through its wholly owned subsidiary, American Modern Insurance Group,
Midland’s operations focus on specialty insurance, which includes niche
segments such as insurance for manufactured housing and motorhomes. Thanks
to its disciplined underwriting policy, American Modern has been able to
post high earnings in the last few years and low combined ratios (2006:
93.0%; 2005: 93.8%; 2004: 96.3%).

With premium income of US$ 832m (€679m) in 2006, Midland is one of the
leading US specialty insurers. Midland operates through specialist
companies, and via various distribution channels. With this set-up and a
presence in 50 states, Midland is excellently positioned.

Establishing and building on a leading position in niche segments of the US
primary insurance market is a component of Munich Re’s Changing Gear
programme. In 2006, Munich Re America wrote gross premiums of US$ 747m
(€609m) in primary insurance specialty segments. The total market for
specialty insurances in 2006 was estimated at around US$ 80bn (€65bn).

If Midland’s shareholders approve, the transaction is expected to be
completed in the second quarter of 2008, once all the requisite approvals
have been obtained from the competent authorities.

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Information and Explaination of the Issuer to this News:

This announcement contains forward-looking statements that are based on
current assumptions and forecasts of the management of Munich Re. Known and
unknown risks, uncertainties and other factors could lead to material
differences between the forward-looking statements given here and the
actual development, in particular the results, financial situation and
performance of our Company. The Company assumes no liability to update
these forward-looking statements or to conform them to future events or
developments.
17.10.2007 Financial News transmitted by DGAP

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Language: English
Issuer: Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München
Königinstraße 107
80802 München
Deutschland
Phone: +49(0) 89 3891-0
Fax: +49(0) 89 399 056
E-mail: shareholder@munichre.com
Internet: www.munichre.com
ISIN: DE0008430026
WKN: 843002
Indices: DAX, EURO STOXX 50
Listed: Amtlicher Markt in Frankfurt (Prime Standard), München;
Freiverkehr in Berlin, Hannover, Düsseldorf, Stuttgart,
Hamburg; Terminbörse EUREX; Foreign Exchange(s) Mailand

End of News DGAP News-Service

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