PartnerRe Signs Agreements To Acquire Winterthur Re Swiss Operation

Bermuda-based PartnerRe says it has signed a definitive agreement with Winterthur Insurance, under which PartnerRe acquires Winterthur Re's Swiss Operation, part of Winterthur Insurance. At the same time, PartnerRe also entered into a reinsurance agreement, transferring the Swiss life and non-life portfolios, including the current business and reserves of approximately $1.5 billion, to Partner Reinsurance Company Ltd., Bermuda. The purchase agreement for the U.S. operations, both life and non-life, is expected to be executed shortly.

PartnerRe has started the integration process of the Swiss operation by initiating the formation of a branch in Winterthur, Switzerland. This branch formation is expected to be completed before the end of October 1998. The 180 employees of Winterthur Re in Switzerland will transfer to the newly formed branch, effective January 1, 1999.

Herbert Haag, president and CEO of PartnerRe commented, "We are very pleased that we have smoothly finalized the terms for the transfer of the Swiss operation. My experience in this process has affirmed my belief in the high level of expertise in Winterthur Re's organization and their conservative reserving philosophy. Winterthur Re's specialty emphasis and profit-oriented underwriting approach will prove a perfect fit with the existing culture of PartnerRe. Not only will we achieve a significant strengthening of our global presence and capabilities, but this transaction also allows us to immediately enhance capital utilization and a further diversification of risks. The benefits of the combined operation for clients and shareholders alike will prove a differentiating factor in today's competitive reinsurance environment."

Haag continued, "We are now working diligently to complete the U.S. portion of this transaction and are not anticipating any difficulties in that regard. Due, however, to the customary regulatory approvals, we do not expect to close the entire transaction until sometime in December."

The aggregate purchase price for both the Swiss operation and the U.S. operation is expected to be approximately $780 million and will be funded with $560 million of funds from internal sources and $220 million of external debt. This transaction will be accounted for as a purchase; goodwill is expected to be approximately $350 million. PartnerRe anticipates this transaction to be non-dilutive in 1998 and beyond.