Baloise Holding AG and Helvetia Holding AG are in talks about a potential merger that could create one of the largest insurance companies in Switzerland. Sources close to the discussions, who wish to remain anonymous, say the companies have been having on-and-off conversations over the past few months.
After news of the talks broke, Baloise’s shares rose by 0.4%, peaking at a 1.7% increase earlier in the day. This year, Baloise’s stock has climbed about 8%, giving it a market value of around 8.2 billion Swiss francs, or about $9.4 billion. Helvetia, on the other hand, has seen its market value reach approximately 9.4 billion francs following a 16% rise in its stock price this year.
While discussions are ongoing, there is no guarantee that they will lead to a deal. If the merger moves forward, it could attract interest from other major players in the insurance sector, like Zurich Insurance Group.
These talks come amid a broader trend of mergers and acquisitions in the European financial industry, which has seen various companies exploring partnerships and takeovers. Baloise, led by CEO Michael Mueller, has been a hot topic in the insurance world, partly due to pressure from Cevian Capital, a Swedish activist investor holding a 9.4% stake in the company. Cevian has been advocating for Baloise to concentrate on its core Swiss operations and consider selling off non-essential assets.
A merger between Baloise and Helvetia would create a major domestic insurer with operations not just in Switzerland but also in Germany, Belgium, Luxembourg, and Spain. Helvetia has a long history, having been established in 1858 and formed through various mergers, including a significant one with Nationale Suisse in 2014. Last year, Helvetia reported a business volume of 11.6 billion francs, while Baloise generated 8.6 billion francs in annual premiums.
As these discussions unfold, the insurance industry is watching closely to see if they will lead to a significant consolidation in the market.