Fortis Inc. · TSX:FTS
Fortis — Merger or Acquisition (March 2007)
14 slides from Fortis's merger presentation, Mar 1, 2007
Slide 1: Fortis to acquire a majority stake in Pacific Century Insurance
Getting you there. Fortis to acquire a majority stake in Pacific Century Insurance March 1, 2007
Slide 2: Disclaimer
Disclaimer These pages are intended to provide investors with financial information about Fortis’ business plans. The financial information contained in this presentation has been prepared by Fortis on a pro forma basis and has not been audited. The figures are provided for information purposes only
Slide 3: Transaction Summary
1. Transaction Summary Fortis to acquire control in Pacific Century Insurance Holdings Limited (“PCI”) Purchase – A total consideration of HKD 3.5 billion (EUR 341 million)(1) for 431 million shares Price representing over 50% of PCI’s total share capital on a fully diluted basis, from Pacific Centu
Slide 4: Hong Kong: An Attractive Life Insurance Market
2.1 Hong Kong: An Attractive Life Insurance Market 1. Attractive Savings Market (1) 2. Low Deposit Rate (%) (2) 48% 46% 10 50% 43% 8.2 40% 8 33% 32% 32% 30% 6.2 26% 30% 25% 6 4.9 4.4 3.7 3.7 20% 4 2.5 26% 10% 2 0.8 0% 0 a na a g nd e a a a an na a g nd a e di on si si a or an re di on si si or hi la
Slide 5: PCI – Where We Stand Today
2.2 PCI – Where We Stand Today Market share position based on number of in-force policies (%), 3Q2006E 27.0% No. of in-force policies 2,500,000 2,024,697 2,000,000 13.7% 11.7% 10.1% 1,500,000 1,031,125 879,813 4.7% 4.5% 4.1% 1,000,000 756,502 4.1% 2.6% 2.3% 352,913 334,793 311,496 308,066 500,000 19
Slide 6: Fortis is the Logical Partner to Take PCI Forward
2.3 Fortis is the Logical Partner to Take PCI Forward – Stable and well financed owner – Deep financial industry expertise – Greater capital and resources – International expertise – Can help the business grow Acquisition of PCI | 01 March 2007 | 6
Slide 7: Overview of Transaction Rationale
3.1 Overview of Transaction Rationale 9 Excellent Fit, Fully Aligned with Fortis Strategy 9 A Significant Addition and Strong Complementary Fit to Our Existing Asian Platform 9 A Quality Franchise in a Highly Profitable and Growing Market 9 Strong Growth Potential Under Fortis Management by Leveragi
Slide 8: Consistent with Fortis Strategy
3.2 Consistent with Fortis Strategy Fortis – Expanding outside home market (Benelux countries), organically and through Strategy selective acquisitions – Strong Focus on the enlarged Europe and selective growth in Asia and North America Pacific – Expanding our Asian footprint by entering new selecte
Slide 9: A Significant Addition to Our Asian Platform
3.3 A Significant Addition to Our Asian Platform Hong-Kong India – Controlling stake China / Taiping Life – GWP 2006: EUR 189 mm – March 2006: MoU with IDBI – N°7 in terms of in-force policies – December 2001 for Life Insurance JV – N°9 with market share of 2.5% in terms – Shareholding: Fortis 24.9%
Slide 10: A Major Step in Fortis' Asian Expansion
3.4 A Major Step in Fortis’ Asian Expansion – Hong Kong is one of our prioritized life insurance markets in Asia – 6th largest in Asia by premium: ~ EUR 11.8 billion in 2005 An Opportunity to – Strong and stable growth: ~30% average growth p.a. in new business premium Enter the Attractive over recen
Slide 11: An Attractive Acquisition Opportunity
3.5 An Attractive Acquisition Opportunity – Quality business with sound fundamentals and attractive business mix A Quality – A high performing agency sales force, 5th largest in Hong Kong, with superior Franchise … productivity and exceptionally high persistency – Continually invested in infrastruct
Slide 12: Further Growth Potential Under Fortis Management
3.6 Further Growth Potential Under Fortis Management Potential initiatives may include: Agency Force Product Offerings – Nurture and grow the agency – Extend the product range while force Agency Force maintaining margins Product Offerings – Improve efficiency and – Introduce a new range of products
Slide 13: Restatement of Transaction Rationale
5. Restatement of Transaction Rationale 9 Excellent fit and fully in line with Fortis strategy 9 A significant addition and strong complementary fit to our existing Asian platform 9 A quality franchise in a highly profitable and growing market 9 Enhanced business opportunities under Fortis managemen
Slide 14: Questions and Answers
Getting you there. Questions and Answers